INR edges lower in tight moves; weighed down by higher oil prices, weaker dollar and muted equities

The Indian rupee traded in a tight range and settled for the day at 94.97 (provisional) on Wednesday, recording a marginal loss of 2 paise as the support from foreign capital inflows was negated by weak local equities and a strong US dollar. Brent crude prices have risen to USD 95 per barrel and the dollar index is hovering around 99.80 on a bout of risk aversion on renewed US-Iran tensions. Moreover, market participants have raised the probability of a hike in interest rates by the US Federal Reserve in September, pushing US Treasury yields higher and triggering a broad dollar rally. Indian shares fell notably on Wednesday to extend recent losses amid hawkish Federal Reserve expectations and escalating Middle East tensions. The BSE Sensex falling 373.93 points (0.49%) to settle at 76,570.35 and the NSE Nifty 50 dropping 141.35 points (0.59%) to finish at 23,914.45.