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

The Indian rupee faced a slight setback on Tuesday, closing 2 paise lower at 94.60 against the US dollar. This minor decline interrupted a significant two-session recovery, despite favorable global developments regarding oil prices and geopolitical stability in West Asia.

Geopolitical Optimism vs. Capital Outflows

The domestic currency's performance was caught between conflicting market forces. On one hand, the rupee received support from the de-escalation of tensions in West Asia. The potential reopening of the Strait of Hormuz—a critical global energy shipping route—following a US-Iran peace framework agreement has provided a psychological cushion for emerging market currencies.

On the other hand, the rupee's gains were capped by persistent foreign capital outflows. While domestic equity benchmarks saw a rally, with the BSE Sensex rising 544.15 points to 76,808.48 and the NSE Nifty climbing 135.25 points to 23,989.15, Foreign Institutional Investors (FIIs) remained net sellers. Data shows FIIs offloaded equities worth ₹749.18 crore during the session, putting downward pressure on the rupee.

The Impact of Easing Crude Oil Prices

For an economy like India, which imports nearly 90% of its oil requirements, crude oil volatility is a primary driver of currency strength. On Tuesday, Brent crude, the global oil benchmark, saw a decline of 1.68%, trading at $81.77 per barrel in futures trade.

Market experts note that lower crude prices act as a "favorable wind" for the rupee by reducing the country's import bill and easing the current account deficit. The expected formal signing of the peace deal in Switzerland, led by US Vice President JD Vance, is expected to further stabilize energy markets and support the rupee's outlook.

Expert Outlook and Expected Trading Range

Despite the minor slip, analysts remain constructive regarding the rupee's near-term trajectory. The interbank foreign exchange market saw the rupee open at 94.69 and fluctuate between a range of 94.48 and 94.71 before settling at 94.60.

Analis pasar menyarankan level teknis berikut untuk pasangan USD-INR:

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