The Indian rupee fell to around 94.8 per dollar, retreating after a brief stabilization as renewed strength in the greenback and shifting expectations for US monetary policy overshadowed lower crude oil prices. The currency came under renewed pressure after the dollar index climbed to its highest level in more than a year, driven by growing market expectations that the Federal Reserve could implement one or two additional interest-rate hikes before the end of the year. The rupee’s decline was partly cushioned by a sharp drop in oil prices, with Brent crude falling below $77 per barrel and posting losses of roughly 16.5% for the month. The decline in energy prices has been supported by signs that tanker movements through the Strait of Hormuz are gradually returning to normal. Additional support came from improving capital-flow dynamics. Foreign investment into Indian debt markets has strengthened, while equity-market outflows have moderated compared with earlier months.
Rupee Holds Firm on Softer Oil
The Indian rupee hovered near 94.3 per dollar, steadying after reaching six-week highs as easing geopolitical tensions and softer crude oil prices supported sentiment. Oil prices declined after Iranian officials reported progress in negotiations with the United States, with Brent crude for August delivery falling 1.7% to $79.24 per barrel following signs of constructive talks in Switzerland. However, uncertainty persisted after US President Donald Trump warned that military action against Iran could resume, even as Vice President JD Vance met Iranian officials under an interim peace arrangement. Tehran’s renewed closure of the Strait of Hormuz added to market caution. Gains were partly capped as the dollar index held just below 101 and the benchmark 10-year US Treasury yield edged higher, though it remained below recent peaks. Investors are now focused on upcoming US inflation and growth data for clues on the Federal Reserve’s policy outlook.
Rupee Rises to 6-Week High
The Indian rupee hovered around 94.2 per dollar, extending gains to a six-week high as improving capital flows lifted investor sentiment. Market participants reported an improvement in foreign-exchange flows, with increased investment into Indian bonds and a slowdown in foreign equity outflows helping strengthen demand for the local currency. This marks a shift from the one-sided dollar demand that had pressured the rupee in recent weeks. The decline in crude oil prices following easing geopolitical tensions has reduced pressure on India’s import bill. Interbank market sentiment has also improved, with traders becoming more willing to take positions on both sides of the market rather than consistently buying dollars on dips, reflecting increased confidence in the rupee. However, the rupee’s gains remain challenged by a stronger dollar, with expectations of tighter Federal Reserve policy boosting demand for the greenback amid persistent inflation concerns.
Indian Rupee Retreats on Firmer Dollar
The Indian rupee hovered around 94.6 per dollar, retreating from recent gains as the US dollar strengthened after the Federal Reserve concluded its latest policy meeting. Investors reassessed the interest-rate outlook after the Fed unanimously left its benchmark rate unchanged at 3.5%–3.75%, while updated projections signaled a notable shift in policymakers’ expectations. Further pressure on the rupee came as US Treasury yields climbed, with the two-year yield rising 12 basis points, supported by a series of resilient economic indicators that reinforced the case for higher-for-longer interest rates. Meanwhile, crude oil prices continued to move lower after the United States and Iran reached an interim agreement to halt the conflict and restore traffic through the Strait of Hormuz, easing concerns over energy supply disruptions.
Indian Rupee remains flat as risk-on mood weighs on US Dollar
- The Indian Rupee holds ground as oil prices continue to ease.
- Indian shares opened higher but edged lower as caution grew ahead of the US Fed policy decision.
- Traders expect a hawkish tone from Fed Chair Kevin Warsh during his first policy meeting on Wednesday.
The Indian Rupee (INR) holds ground after two days of gains against the US Dollar (USD) on Wednesday. However, the upside potential for the USD/INR pair could be capped in the near term as downward pressure on the Indian Rupee eases, supported by declining global oil prices.
Following recent policy interventions by the Reserve Bank of India (RBI), economists have notably upgraded their forecasts for the nation’s balance of payments. Most analysts now anticipate a small surplus, marking a sharp reversal from previous projections of a substantial deficit.
However, the true extent of any Rupee rally will ultimately hinge on the central bank’s comfort level. Experts suggest the RBI may strategically leverage the currency’s strength to pare down its massive foreign exchange forward book, which saw short-dollar positions balloon to a record $104 billion in March during efforts to defend the INR.
Indian equity indexes hold gains on Wednesday despite the prevailing market caution ahead of the US Federal Reserve’s (Fed) upcoming policy decision. The US central bank is widely expected to maintain its cautious “wait-and-see” stance, keeping benchmark interest rates steady within the 3.50% to 3.75% range.
Nevertheless, market participants remain highly attentive, as traders expect Fed Chair Kevin Warsh to adopt a more hawkish tone during his first policy meeting later in the day. This cautious domestic sentiment follows a mixed session on Tuesday, where institutional data from the NSE revealed that foreign institutional investors sold shares worth INR 749.18 crore, while domestic institutional investors made modest purchases worth INR 6 lakhs.
Broader market sentiment also faces headwinds from lingering global uncertainties and geopolitical frictions. Industry experts express widespread skepticism regarding a swift economic rebound, warning that shipping and energy exports could take several weeks to fully recover from recent disruptions. Complicating the global outlook further, the Iran-backed group Hezbollah stated in Lebanon that Iran would likely refuse a final nuclear agreement unless Israel withdraws from Lebanese territory, adding a layer of geopolitical risk that continues to keep investors on edge.
West Texas Intermediate (WTI) oil price extends losses for the fifth successive day, trading around $75.20 per barrel at the time of writing. Crude oil prices declined as anticipation grew over a looming United States (US)-Iran peace deal that could significantly boost global supply.
The US and Iran are scheduled to sign an interim agreement in Switzerland this Friday, which would grant Tehran broad economic incentives and allow the immediate resumption of Iranian oil exports. Furthermore, international tankers are expected to resume safe transit through the strategic Strait of Hormuz once the pact officially takes effect.
Technical Analysis: USD/INR trades near 94.50 above descending triangle bottom
USD/INR flattens after two days of losses, trading around 94.40 at the time of writing. The technical analysis of the daily chart suggests that spot price sits just slightly above the lower boundary of the descending triangle, indicating the “drumroll” moment of the pattern.
The flat lower boundary represents a major demand zone where buyers have historically stepped in to stop the bleeding. When the spot price hovers just above it, the market is testing whether those buyers still have the cash and the will to defend that floor.
The USD/INR pair maintains a bearish near-term tone as it holds below both the nine-day and 50-day Exponential moving averages (EMAs). The clustering of these EMAs above the spot hints at a capped market, while the 14-day Relative Strength Index (RSI) around 40 suggests weak momentum, reinforcing the risk of further downside as long as price remains suppressed beneath these moving averages.
The immediate support lies at the lower boundary of the descending triangle around 94.30, while the initial resistance lies at the 50-day EMA of 94.73, followed by the nine-day EMA at 94.90.
Indian Rupee trades firmly amid signs of renewed FIIs’ interest towards Indian stock market
- The Indian Rupee trades firmly against the US Dollar due to multiple tailwinds.
- Lower oil prices and signs of improvement in FIIs sentiment towards the Indian stock market have strengthened the Indian Rupee.
- The Fed is expected to leave interest rates steady on Wednesday.
The Indian Rupee (INR) opens firmly against the US Dollar (USD) on Tuesday. The USD/INR pair trades lower around 94.58 as lower oil prices due to the successive reopening of the Strait of Hormuz, following the signing of a peace deal between the United States (US) and Iran, and signs of improvement in sentiment of overseas investors towards the Indian stock market have strengthened the Indian Rupee.
In the opening session, the MCX Crude Oil contract expiring on June 18 rises slightly to near 7,640, but is close to its over eight-week low of 7,550 posted on Monday.
Currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs, tend to outperform when oil prices remain lower.
US-Iran signs peace deal
On Monday, US President Donald Trump announced that a peace deal with Iran had signed and the Strait of Hormuz had fully reopened. Trump added that details of the deal will be released shortly, but confirmed that Tehran won’t have nuclear weapons.
Investors await details of the deal to get clarification regarding whether Hormuz remains toll-free or not. The resumption of normal traffic will keep oil prices lower, a scenario that will be favorable for the Indian currency.
FIIs turns of net buyers for first time in June
On Monday, Foreign Institutional Investors (FIIs) emerged as net buyers in the Indian stock market for the first time in June after diluting their stake worth Rs. 46,430.42 crore in the first two weeks. The sentiment of foreign investors towards the Indian equity market appears to have improved due to the US-Iran peace deal signing, which has eased the global risk-off impulse. In Monday’s session, FIIs bought shares worth Rs. 200.05 crore.
Investors await two-day Fed policy meeting
This week, the major trigger for the US Dollar will be the Federal Reserve’s (Fed) monetary policy announcement on Wednesday. According to the CME FedWatch tool, the Fed is certain to leave interest rates unchanged in the 3.50%-3.75%.
Investors will pay close attention to the Fed’s monetary policy guidance under the new Chairman Kevin Warsh, and interest and economic projections in the near-to-longer term.
US President Trump has provided significant breathing room to Chairman Warsh by giving him a free hand on decision-making, stating in recent days that he wants him to “do whatever he wants” and “be totally independent”, CNBC reported. While Trump was seen criticizing former Chairman Jerome Powell numerous times for not reducing interest rates quickly, despite inflationary pressures remaining higher.
Technical Analysis: USD/INR stays below 20-day EMA
USD/INR trades weakly at around 94.58, extending a corrective phase below its 20-day exponential moving average (EMA) at 95.2580, which now acts as the first topside barrier and keeps the near-term bias tilted lower.
The Relative Strength Index (RSI) at 42.6 remains below the midline, suggesting waning bullish momentum and leaving the pair vulnerable while it holds under the short-term EMA cap.
On the topside, a daily close above the 20-day EMA around 95.26 would be needed to ease immediate downside pressure and open the way for a more sustained rebound towards 96.00. Looking down, the pair could extend the decline to the May 7 low at 94.03 if it fails to hold the June 15 low at 94.43.
Indian Rupee surges as oil prices nosedive on US-Iran MoU finalization
- The Indian Rupee soars against the US Dollar on the finalization of the US-Iran deal.
- Plunging oil prices due to the reopening of the Strait of Hormuz, as per the post from US President Trump.
- The selling pressure by overseas investors has slowed down in the last two trading days.
The Indian Rupee (INR) opens strongly against the US Dollar (USD) at the start of the week. The USD/INR pair plunges to near 94.60 as oil prices have nosedived, following the announcement that the United States (US) and Iran have reached a permanent peace deal.
In India’s opening trading hours, the MCX Crude Oil contract expiring on June 18 is down 5.5% to near 7,630, the lowest level seen in almost two weeks.
The appeal of currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs, improves significantly when oil prices fall like a house of cards.
US-Iran reaches peace deal
On Sunday, both the US and Iran confirmed that they have finalized a Memorandum of Understanding (MoU).
Iran’s Supreme National Security Council confirmed Sunday that Tehran had finalized an MoU, saying all military operations on all fronts, including Lebanon, would cease “immediately and permanently”, CNBC reported.
US President Donald Trump also said in a post on Truth Social, “I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade.”
Meanwhile, Pakistan Prime Minister (PM) Shehbaz Sharif has stated in a post on X, formerly known as Twitter, that the finalized MoU between the US and Iran will be signed on June 19 in Switzerland.
FIIs selling pressure cool down
Although Foreign Institutional Investors (FIIs) have remained net sellers in all trading days so far in June, a slowdown in the pace of selling pressure is observed in the last two trading days. So far this month, FIIs have offloaded their stake worth Rs. 46,430.42 crore, an average selling of Rs. 4,643 crore in 10 trading days. In the last two trading days, the average selling by overseas investors was Rs. 1,534.63 crore.
India’s WPI Inflation data awaited
On the domestic front, investors await India’s Wholesale Price Index (WPI) Inflation data for May, which will be published at 12:00 PM IST (06:30 GMT). Inflation at the wholesale level is expected to arrive higher at 9.1% from 8.3% in April.
Theoretically, higher inflation at the factory level boosts expectations for the Reserve Bank of India’s (RBI) interest rate hikes in the near-term. However, the impact is expected to be limited as oil prices have started declining, a scenario that would anchor inflation expectations.
Technical Analysis: USD/INR slides to near 94.60
USD/INR tumbles to near 94.60 in the opening trade. The near-term bias of the pair turns bearish as it extends distance with the 20-day exponential moving average (EMA), which is at 95.33, on the downside.
The pair’s slide away from that dynamic barrier keeps the short-term trend under pressure, while the Relative Strength Index (RSI) near 42 leans lower, suggesting sellers retain control despite not yet reaching oversold territory.
On the topside, initial resistance is defined by the 20-day EMA at 95.33, where a sustained break higher would be needed to ease the current downside pressure and open the way for a deeper corrective bounce towards 96.00. Looking down, the pair could slide to the May 7 low at 94.03 if it drops below the May 29 low at 94.46.
Indian Rupee slumps as oil price surges amid fears of US-Iran ceasefire collapse
- The Indian Rupee faces intense selling pressure against the US Dollar due to a strong recovery in oil prices.
- FIIs continue to squeeze their stake in the Indian stock market.
- India’s CPI in May is seen higher at 4% YoY from 3.48% in April.
The Indian Rupee (INR) tumbles at open against the US Dollar (USD) on Thursday, with the USD/INR pair rising to near 95.65. The pair gains as a sharp recovery in oil prices due to fears surrounding the collapse of the ceasefire between the United States (US) and Iran has weakened the Indian Rupee.
In India’s morning session, the MCX Crude Oil contract expiring on June 18 is up 0.7% to near 8,787. The contract surged 3.6% on Wednesday even after recovering significant losses.
The appeal of currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs, diminishes in a high oil price environment.
US launches strikes against Iran’s unwarranted aggression
On late Wednesday, the US Central Command (CENTCOM) confirmed that it launched additional “self-defense strikes” on multiple targets in Iran as retaliation against Tehran’s “unwarranted and continued aggression”. This came after the US CENTCOM launched a series of attacks on Iran’s air defense, ground control stations, and surveillance radar sites near the Strait of Hormuz on Tuesday in response to Iran shooting down the US Apache helicopter.
Additional military operations from Washington were already anticipated as US President Donald Trump said in an interview with Fox News that he is close to ordering new strikes against Iran for taking too long in finalizing a deal.
Before remarks pointing to ordering fresh strikes against Iran, US President Trump also said in a post on Truth Social that Iran has to pay the price for taking too much time in reaching a deal.
However, the ceasefire between the US and Iran announced in April appears not to have collapsed yet as US President Trump has told aides to deliver a message to Iran via Qatar that the attacks did not mean a “restart of all-out war,” and were only in response to the helicopter downing, The Wall Street Journal (WSJ) reported.
FIIs keep squeezing stake in Indian stock market
Overseas investors continue to pare their stake in the Indian stock market as higher oil prices keep weighing on India Inc.’s earnings projections. So far in June, Foreign Institutional Investors (FIIs) have remained net sellers on all trading days and have offloaded their stake worth Rs. 62,654.34 crore.
India’s CPI data awaited
On the domestic front, the major trigger for the Indian Rupee will be the Consumer Price Index (CPI) data for May, which will be published on Friday. Investors will closely monitor the data to get fresh cues regarding the Reserve Bank of India’s (RBI) monetary policy outlook.
In the policy meeting last week, the RBI kept the Repo Rate unchanged at 5.25%, as expected, and warned that the central bank would need to act “if inflation gets generalized”.
India’s CPI data is expected to arrive higher at 4% Year-on-Year from 3.48% in April.
Technical Analysis: USD/INR stays in Symmetrical Triangle formation
USD/INR trades higher at around 95.65 at press time. The near-term trend of the pair appears to be sideways in an overall bullish structure amid the Symmetrical Triangle formation. The pair remains close to the 20-day exponential moving average (EMA), which is at 95.4886, indicating a sideways trend.
The Relative Strength Index (RSI) at 53.79 is near neutral but slightly positive, hinting that upside pressure persists, even as the pair consolidates beneath the descending resistance trend structure derived from prior highs.
On the topside, initial resistance is seen at the bearish trend-line break area near 96.03, where a clear daily close above would open the way for a more sustained recovery towards the all-time high at 97.08. On the downside, immediate support sits at the 20-day EMA at 95.49, with the next, more structural, floor at the rising trend-line region around 94.77; a break below this latter level would weaken the current constructive tone and expose deeper retracements.
