Forex News: Indian Rupee Rises On RBI Malhotra's Intervention Comments

Indian Rupee Rises On RBI Malhotra's Intervention Comments

(RTTNews) - The Indian rupee strengthened against the U.S. dollar in the European session on Monday, amid increasing anticipation of more Reserve Bank of India (RBI) intervention in foreign exchange markets.

Earlier in the day, RBI Governor Sanjay Malhotra said in an interview to Mint that the central bank is prepared to step in to stop one-way, disproportionate moves against the domestic currency.

Malhotra's confidence is bolstered by the fact that the central bank had sufficient measures, including reserves of around $700 billion, to curb any excessive speculative activity.

Additionally, Malhotra of the RBI expressed optimism that if the Middle East crisis begins to normalize, the Indian Rupee will begin to appreciate.

Also, the Indian Rupee was strengthened by a notable drop in oil prices at open due to increased expectations of the US-Iran deal. Oil prices have sharply increased after Iran said that coastal nations should handle the Strait of Hormuz issue.

European shares traded higher on hopes for a U.S.-Iran peace deal sent oil prices sharply lower and eased inflationary concerns.

Oil prices tumbled nearly 5 percent and the rupee extended gains for a third straight session to hit a two-week high at around 95.28 to the dollar after U.S. President Donald Trump said on Saturday a peace deal with Iran had been "largely negotiated."

Media reports suggested that the U.S. and Iran are working toward a deal to extend their fragile ceasefire by 60 days and reopen the Strait of Hormuz. Also, it was said that Tehran has agreed to dispose highly enriched uranium.

Against the U.S. dollar, the rupee rose to a 2-week high of 95.23 from an early low of 95.36.

If the rupee extends its uptrend, it is likely to find resistance around the 94.00 region.

Looking ahead, Canada wholesale sales data for April is due to be released in the New York session.

The U.S., U.K. and several key markets in Europe are closed for public holidays.

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