INR vs USD: The rupee strengthened by 58 paise against the US dollar to 94.60 in early trading on Monday, supported by a sharp decline in global crude oil prices after US President Donald Trump announced that Washington and Tehran had reached an agreement to end the conflict.
Forex traders said the domestic currency also benefited from a strong opening in Indian equity markets and weakness in the US dollar.
In the interbank foreign exchange market, the rupee opened at 94.70 per dollar and later advanced to 94.60, marking a gain of 58 paise from its previous close.
The domestic currency had strengthened by 67 paise against the US dollar, ending Friday’s session at 95.18.
“The Indian rupee witnesses a positive bias on Monday, with USDINR trading near 94.67 with a bearish gap opening, supported by a sharp decline in crude oil prices following reports of a U.S.-Iran peace agreement and the reopening of the Strait of Hormuz. Lower oil prices are positive for India, a major crude importer, as they help reduce the country’s import bill and ease pressure on the current account deficit. Additionally, softer U.S. dollar sentiment, declining Treasury yields, and improving risk appetite across Asian markets have boosted regional currencies, including the rupee. While India’s inflation rose to 3.9% in May, it remained below the RBI’s 4% target, providing macroeconomic stability,” said Kaveri More, Commodity Technical Analyst at Choice Broking.
What’s driving the Indian currency today?
The US and Iran have reportedly reached an agreement to end their 107-day conflict and reopen the Strait of Hormuz—a critical maritime route through which nearly 20% of the world’s oil supply is transported. The deal was finalised following in-person negotiations in Switzerland, with the formal signing scheduled for June 19.
Trump announced the development on the social media platform Truth Social on Sunday evening. The agreement helped ease concerns in global energy markets, as officials confirmed that the peace accord would be signed in Switzerland later this week.
“The Deal with the Islamic Republic of Iran is now complete. Congratulations to all,” Trump said, adding that it would reopen the Strait of Hormuz and end the US naval blockade on Iranian ports.
The dollar index, which measures the US dollar’s performance against a basket of six major currencies, slipped 0.22% to 99.53.
Meanwhile, Brent crude, the global benchmark for oil prices, declined 4.66% to USD 83.26 per barrel in futures trading.
Rupee near-term outlook
Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities, believes that the Indian currency is likely to strengthen in the coming weeks.
“Over the next one to two weeks, we expect it to strengthen towards 94, and a decisive break of that level would open the door to 93, and potentially 92.5, over the following 2-3 months. For now, 94 is the key level to watch, and below that, 93,” Banerjee said.
Meanwhile, More added that the RBI’s recent measures to attract dollar inflows, including the revival of an NRI deposit window, may further support the domestic currency.
“However, market participants will closely monitor the upcoming Federal Reserve policy decision and comments from Chair Kevin Warsh for signals on the future path of US interest rates, which could influence near-term rupee direction,” More said.
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