NEW Delhi: Rupee began the week on a negative note, falling 5 paise to 94.98 against US dollar in early trade. Rising crude oil prices and growing tensions in the Middle East put pressure on the currency, while a weaker dollar and lower US Treasury yields helped limit the fall.




The currency opened at 94.92 in the interbank forex market before slipping to 94.98. This followed a 12-paise fall on Friday, when it closed at 94.93 against the dollar, marking its second straight day of losses.




Forex traders said that growing uncertainty over the Middle East conflict weighed on the rupee. High oil prices and selling by foreign investors could add to the pressure, while a weaker dollar and possible intervention by the Reserve Bank of India (RBI) may offer some support.




Anuj Choudhary, research analyst at Mirae Asset Sharekhan, told PTI “The Indian rupee opened slightly lower on elevated crude oil prices and geopolitical tensions in the Middle East. However, softness in the US Dollar and US treasury yields cushioned the downside."




"We expect the rupee to trade with a slight negative bias on risk aversion in global markets amid escalation of tensions in the Middle East. Elevated crude oil prices and selling pressure by FIIs may also pressurise the rupee. However, weak US Dollar and any fresh intervention by the RBI may support the rupee at lower levels," Choudhary added.




The dollar index, which measures the US currency against six major currencies, fell 0.15% to 101.49. However, this was not enough to prevent the rupee from declining.




Brent crude, the global oil benchmark, rose 1.92% to $114.48 per barrel in futures trade.




Dalal Street also opened lower, with the Sensex falling 536.30 points to 72,583.86 and the Nifty declining 200.10 points to 22,402.80. Last week on Friday, foreign institutional investors (FIIs) bought Indian shares worth Rs 887.65 crore, according to exchange data. India's foreign exchange reserves fell by $5.011 billion to $721.016 billion in the week ended October 16, according to Reserve Bank of India data released on Friday.




This followed a larger decline of $8.578 billion in the previous week, when reserves stood at $726.027 billion.