Rupee Exchange Rate Update: Currency Declines 2 Paise to Close at 94.60 Against US Dollar
The Indian rupee closed at 94.60 against the US dollar on Tuesday, down 2 paise, ending a two-day gaining streak. This decline occurred despite easing crude oil prices and positive sentiment surrounding a potential peace agreement between the United States and Iran. The domestic currency opened at 94.69 and fluctuated between 94.48 and 94.71 before settling lower than its previous close of 94.58.
Forex traders noted that the rupee found some support from reduced tensions in West Asia and the anticipated reopening of the Strait of Hormuz, a crucial global energy shipping route. However, foreign capital outflows from Indian equities limited the rupee’s gains, contributing to its slight depreciation. The rupee had previously strengthened by 60 paise on Monday and 67 paise on Friday, indicating a robust recovery over the last two sessions.
Lower oil prices support outlook
Brent crude, the global oil benchmark, was trading 1.68% lower at $81.77 per barrel in futures trade. Amit Pabari, managing director of CR Forex Advisors, remarked that lower crude prices act as a favorable factor for the rupee, given that India imports nearly 90% of its oil requirements. The recent easing in oil prices follows a US-Iran peace framework agreement, which is expected to facilitate the reopening of the Strait of Hormuz, a vital passage for global oil and liquefied natural gas exports.
Analysts see positive near-term trend
Market analysts maintain a positive outlook for the rupee in the near term. Anuj Choudhary, a research analyst at Mirae Asset ShareKhan, indicated that the USD-INR spot price is likely to trade within a range of 94.10 to 94.90. Dilip Parmar, a research analyst at HDFC Securities, added that the USD-INR is expected to exhibit a downward bias, with spot levels gravitating towards 94.10. He noted that 95.20 may serve as a near-term resistance level, limiting any corrective moves.
Equity markets rally, FIIs remain sellers
Domestic equity markets closed higher on Tuesday, with the BSE Sensex gaining 544.15 points to reach 76,808.48, while the NSE Nifty rose by 135.25 points to close at 23,989.15. Despite the market rally, foreign institutional investors continued to be net sellers, offloading equities worth Rs 749.18 crore during the session. Meanwhile, US President Donald Trump announced that Vice President JD Vance will lead the American delegation for the formal signing of the peace deal with Iran in Switzerland on Friday, a development that continues to impact global currency and commodity markets.
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