Rupee Ends Two-Day Rally to Settle Lower at 94.60 Against US Dollar

The Indian rupee faced a slight setback on Tuesday, breaking a two-session winning streak to settle 2 paise lower at 94.60 against the US dollar. Despite positive global developments, including easing crude oil prices and geopolitical optimism, domestic capital outflows prevented the currency from sustaining its momentum.

Countervailing Forces: Crude Oil vs. Equity Outflows

The forex market witnessed a tug-of-war between favorable macroeconomic indicators and domestic selling pressure. On one hand, the rupee received support from the de-escalation of tensions in West Asia. The expected reopening of the Strait of Hormuz—a critical global energy corridor—has contributed to a dip in oil prices. Brent crude, the global benchmark, fell by 1.68 per cent to trade at $81.77 per barrel.

For an economy like India, which relies on imports for nearly 90 per cent of its oil requirements, lower crude prices act as a significant tailwind for the rupee. However, these gains were capped by persistent foreign institutional investor (FII) outflows. On Tuesday, while domestic equity benchmarks like the Sensex and Nifty closed higher, FIIs remained net sellers, offloading equities worth ₹749.18 crore.

Market Volatility and Trading Range

The rupee showed significant intraday movement, opening at 94.69 against the greenback. Throughout the session, the currency fluctuated within a range of 94.48 to 94.71 before finding its settling point at 94.60. This follows a period of robust recovery where the rupee had gained 67 paise on Friday and 60 paise on Monday.

The broader US dollar strength remained relatively stable, with the Dollar Index—which measures the greenback against a basket of six major currencies—trading marginally lower at 99.61. Global markets are also closely watching the upcoming formal signing of the US-Iran peace deal in Switzerland, led by US Vice President JD Vance, which is expected to further influence commodity and currency trends.

Expert Outlook: Resistance and Support Levels

Despite the minor dip, market analysts remain constructive regarding the rupee's near-term trajectory. Most experts anticipate a controlled trading range rather than a sharp collapse.

Anuj Choudhary, Research Analyst bei Mirae Asset ShareKhan, erwartet, dass der USD-INR-Spotpreis in einer Spanne von 94,10 bis 94,90 gehandelt wird. Aus technischer Sicht merkte Dilip Parmar von HDFC Securities an, dass das Währungspaar wahrscheinlich eine Abwärtstendenz beibehalten wird, wobei sich die Spot-Kurse in Richtung der 94,10er-Marke bewegen könnten. Er warnte jedoch davor, dass 95,20 als starkes kurzfristiges Widerstandsniveau fungieren könnte, was signifikante Erholungsrallys begrenzen würde.

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