MUMBAI, June 19 (Reuters) - The Indian rupee edged lower on Friday, after a brief rise earlier in the session, tracking weakness in Asian peers as the dollar firmed on a hawkish turn from the U.S. central bank and as oil prices rose above the key $80-per-barrel level.
The rupee was down 0.1% at 94.4150 per dollar at 12:30 p.m. IST. It opened little changed and rose to 94.21 earlier in the session on the continued unwinding of long dollar bets.
The rupee's recent rally, which has lifted it 0.8% higher for the week, is being tested by a rising dollar. The Federal Reserve's latest policy meeting, the first under new Chair Kevin Warsh, revived rate-hike bets and pushed dollar index to a one-year high.
On the day, the dollar index rose to 100.99.
The benchmark Brent crude contract inched higher and rose above $80 per barrel in Asian trading, after U.S. Vice President JD Vance pulled out of a planned trip to meet Iranian negotiators on Friday to begin talks on implementing the 14-point agreement.
Overall, however, oil has eased from its peak of $126 per barrel hit during the war, and is now $8 above pre-war levels.
"But U.S. yields have not (declined), with the higher-for-longer U.S. rate backdrop remaining a constraint on regional (Asian) FX performance," analysts at MUFG Bank wrote in a note.
The broader sentiment still remained supportive of the rupee due to rising foreign inflows and the prospects of oil prices easing further - shipping through the key the Strait of Hormuz has resumed after the interim U.S.-Iran agreement.
Overseas investors have injected more than $2.2 billion into domestic bonds over the last 10 sessions since the RBI announced measures to attract dollar inflows on June 5, helping offset foreign equity outflows.
Reporting by Khushi Malhotra; Editing by Ronojoy Mazumdar and Janane Venkatraman
Source: Reuters