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

The Indian rupee faced slight pressure on Tuesday, breaking a consecutive two-session winning streak to settle 2 paise lower at 94.60 against the US dollar. Despite positive global cues and easing energy costs, domestic capital outflows prevented the currency from maintaining its upward momentum.

Market Volatility and Daily Range

The rupee's performance in the interbank foreign exchange market showed significant intraday movement. After opening at 94.69 against the greenback, the domestic currency fluctuated within a range of 94.48 to 94.71. It ultimately closed at 94.60, a marginal decline from its previous close of 94.58. This slight dip follows a period of strong recovery, where the rupee had gained 67 paise on Friday and 60 paise on Monday.

Geopolitical Cues and Crude Oil Impact

Global developments, particularly in West Asia, provided a supportive backdrop for the rupee. Optimism surrounding a US-Iran peace framework agreement has led to expectations of the reopening of the Strait of Hormuz, a critical global energy shipping route. This geopolitical de-escalation contributed to a decline in crude oil prices, with Brent crude trading 1.68% lower at $81.77 per barrel.

For an economy like India, which imports nearly 90% of its oil requirements, lower crude prices act as a significant tailwind for the rupee. As noted by market experts, the potential for stabilized energy supplies through the Strait of Hormuz remains a key factor for currency stability.

FII Outflows Cap Domestic Gains

While equity markets showed resilience—with the BSE Sensex rising 544.15 points to 76,808.48 and the NSE Nifty gaining 135.25 points to 23,989.15—the currency faced headwinds from the institutional segment. Foreign Institutional Investors (FIIs) remained net sellers, offloading equities worth ₹749.18 crore during the session. This outflow of foreign capital acted as a primary constraint on the rupee's ability to strengthen further.

Expert Outlook and Resistance Levels

Market analysts remain cautiously optimistic about the rupee's near-term trajectory. Research analysts suggest that the USD-INR spot price is likely to trade within a range of 94.10 to 94.90.

Secondo Dilip Parmar di HDFC Securities, si prevede che la valuta mantenga un orientamento al ribasso nel breve termine, con i livelli spot che potrebbero gravitare verso la soglia di 94,10. Tuttavia, ha avvertito che si prevede che 95,20 fungerà da importante livello di resistenza, il che potrebbe limitare eventuali movimenti correttivi al rialzo.

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