Rupee Snaps Two-Day Rally, Settles Lower at 94.60 Against US Dollar

The Indian rupee broke its recent winning streak on Tuesday, ending slightly lower despite favorable global developments in the energy sector. While geopolitical easing provided some support, persistent outflows from the domestic equity market prevented a stronger recovery.

Rupee Performance and Market Volatility

After two consecutive sessions of significant gains—including a 67-paise jump on Friday and a 60-paise rise on Monday—the rupee closed 2 paise lower at 94.60 against the US dollar. During the interbank foreign exchange market session, the currency experienced volatility, opening at 94.69 and trading within a range of 94.48 to 94.71. This slight depreciation comes as the currency attempts to find a stable footing following its recent recovery phases.

Geopolitical De-escalation and Oil Price Impact

A significant driver for the rupee's recent strength has been the de-escalation of tensions in West Asia. The potential US-Iran peace framework agreement, which is set to be formally signed in Switzerland this Friday with Vice President JD Vance leading the American delegation, has provided much-needed stability.

This geopolitical shift is expected to lead to the reopening of the Strait of Hormuz, a vital global energy shipping route. Consequently, Brent crude, the global oil benchmark, saw a decline of 1.68 per cent, trading at $81.77 per barrel. For India, which relies on imports for nearly 90 per cent of its oil requirements, such lower crude prices act as a significant tailwind for the domestic currency.

FII Outflows Cap Domestic Gains

Despite the positive news from the commodity and geopolitical fronts, the rupee faced headwinds from the Indian equity markets. While domestic benchmarks saw growth—with the BSE Sensex rising 544.15 points to 76,808.48 and the NSE Nifty gaining 135.25 points to 23,989.15—foreign institutional investors (FIIs) remained cautious. Exchange data revealed that FIIs were net sellers, offloading equities worth ₹749.18 crore during the session. This capital outflow exerted downward pressure on the rupee, offsetting the gains provided by the easing dollar index, which sat marginally lower at 99.61.

Expertvisie en voorspelde marges

Marktanalisten blijven voorzichtig optimistisch over de koersontwikkeling van de rupee op korte termijn. Analisten van Mirae Asset ShareKhan suggereren dat de USD-INR spotprijs naar verwachting zal bewegen binnen een marge van 94,10 tot 94,90.

Daarnaast gelooft Dilip Parmar van HDFC Securities dat de valuta op korte termijn een neerwaartse tendens kan aanhouden, waarbij de spotniveaus mogelijk richting de 94,10-grens neigen. Hij waarschuwde echter dat 95,20 een belangrijk weerstandsniveau blijft dat plotselinge opwaartse correctieve bewegingen zou kunnen beperken.

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