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

The Indian rupee faced a slight setback on Tuesday, ending 2 paise lower at 94.60 against the US dollar and snapping a recent winning streak. Despite positive global developments regarding energy security and easing crude prices, domestic capital outflows played a decisive role in capping the currency's recovery.

Global De-escalation vs. Domestic Capital Outflows

The rupee's performance on Tuesday was a tug-of-war between favorable international cues and domestic market pressures. In the interbank foreign exchange market, the currency opened at 94.69 and fluctuated within a range of 94.48 to 94.71 before settling at 94.60, compared to the previous close of 94.58.

While traders noted that the de-escalation of tensions in West Asia provided a support floor for the rupee, the gains were largely neutralized by foreign institutional investors (FIIs). Despite a rally in domestic equity benchmarks—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.

The Impact of Lower Crude Oil Prices

A significant driver for the rupee's recent performance has been the softening of global energy prices. Brent crude, the global benchmark, traded 1.68% lower at $81.77 per barrel in futures trade. For an economy like India, which imports nearly 90% of its oil requirements, lower crude prices act as a vital cushion for the domestic currency.

This downward trend in oil prices is linked to the US-Iran peace framework agreement. The expected reopening of the Strait of Hormuz—a critical global energy shipping route—has brought optimism to commodity markets. With US Vice President JD Vance set to lead the American delegation for the formal signing of the peace deal in Switzerland this Friday, the markets remain highly sensitive to further geopolitical developments.

Expert Projections and Resistance Levels

Despite the minor dip on Tuesday, market analysts maintain a constructive outlook for the USD-INR pair in the near term. Most experts anticipate the rupee will continue to face volatility but may trend toward stronger levels if global tensions remain subdued.

Anuj Choudhary, nhà phân tích nghiên cứu tại Mirae Asset ShareKhan, dự báo tỷ giá giao ngay USD-INR sẽ giao dịch trong phạm vi từ 94,10 đến 94,90. Tương tự, Dilip Parmar từ HDFC Securities cho rằng cặp tỷ giá này có xu hướng giảm, với các mức giá giao ngay có khả năng sẽ hướng về mức 94,10. Tuy nhiên, ông cảnh báo rằng 95,20 vẫn là mức kháng cự quan trọng, có thể kìm hãm bất kỳ đợt điều chỉnh tăng đáng kể nào của đồng đô la.

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