MUMBAI: The Indian rupee weakened for a second straight session on Friday as surging oil prices spurred risk aversion, erasing gains made earlier in the week and leaving the currency little changed, despite easing expectations of further US rate hikes.
The rupee opened the session marginally higher at 94.79 against the US dollar, but turned lower in early trades to hit a low of 94.9725. The currency ended 0.1 percent lower for the day at 94.9400, after depreciating by 0.4 percent on Thursday. It was little changed for the week, after rising 1.4 percent last week.
Oil prices rose in the latter half of the week including in Asian hours, with the benchmark Brent crude touching a more than five-month high, after attacks in Saudi Arabia by Yemen’s Houthis stoked concern over further disruption to energy supplies from the region.
The Brent crude contract was hovering around USD114 per barrel, and is on track to post a third straight weekly surge.
While facing a shock from oil prices, investors have been reassessing technology trades and pulling back from riskier assets on worries about stretched valuations for artificial intelligence-led companies, leading to a selloff in stocks and rising demand for safe-haven US Treasuries.