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

The Indian rupee faced a minor setback on Tuesday, breaking its two-session winning streak to end 2 paise lower at 94.60 against the US dollar. Despite favorable global cues, including easing crude oil prices and geopolitical de-escalation, domestic capital outflows prevented the currency from maintaining its upward momentum.

Geopolitical Optimism vs. Capital Outflows

The rupee's performance on Tuesday was a tug-of-war between positive international developments and domestic market pressures. On one hand, the currency found support from the de-escalation of tensions in West Asia and the anticipated peace framework agreement between the United States and Iran. This agreement is expected to facilitate the reopening of the Strait of Hormuz, a critical global artery for energy shipping.

On the other hand, the gains were capped by persistent selling pressure from foreign institutional investors (FIIs). While Indian equity benchmarks 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—FIIs remained net sellers, offloading equities worth ₹749.18 crore during the session. This exit of foreign capital acted as a primary drag on the rupee.

The Role of Crude Oil and the US-Iran Peace Deal

For an economy like India, which relies on imports for nearly 90% of its oil requirements, energy prices are a decisive factor for currency stability. On Tuesday, Brent crude, the global oil benchmark, traded 1.68% lower at $81.77 per barrel.

The dip in oil prices is closely linked to the diplomatic progress in Switzerland, where US Vice President JD Vance is set to lead a delegation for the formal signing of the peace deal with Iran. Experts suggest that a stable energy market and the potential reopening of key shipping routes provide a "favourable wind" for the rupee, helping to offset some of the volatility in the forex market.

Technical Outlook and Expected Ranges

Despite the slight dip, market analysts remain cautiously constructive regarding the rupee's near-term trajectory. The USD-INR spot price showed intraday volatility, moving within a range of 94.48 to 94.71 before settling at 94.60.

ผู้เชี่ยวชาญในอุตสาหกรรมได้ระบุระดับทางเทคนิคที่สำคัญที่ควรจับตามอง:

สรุปประเด็นสำคัญ