Rupee Rises Sharply Against US Dollar on Easing Crude Oil Prices

Rupee began Wednesday on a strong note, rising over 30 paise against US dollar, extending its recent recovery as easing crude oil prices and a softer dollar index lifted sentiment.

At the interbank foreign exchange, the currency rose 31 paise to touch 94.29 against the greenback. It opened at 94.46 and later climbed to 94.29, marking a gain from its previous close of 94.60 recorded on Tuesday.

Rupee had ended the previous session 2 paise lower against the US currency.

According to forex traders, the rupee began the day on a firm footing as Brent crude prices slipped to around $79 per barrel, their lowest level in three months. Markets have been factoring in the reopening of the Strait of Hormuz following the emergence of the US-Iran framework agreement, they said.

The Indian currency has now recovered 130 paise over the past three trading sessions since the US-Iran deal framework came into focus.

"The rupee's bias has shifted. On the upside, 95.00-95.30 is now a strong resistance zone for USDINR. With expectations of strong foreign capital inflows and USDINR having decisively broken below the 94.80 level, the pair could gradually move towards the 94.00–93.80 zone in the coming days," CR Forex Advisors MD Amit Pabari said.

Pabari further added that the signing of the US-Iran agreement in Geneva on June 19 remains the event to watch. "Until then, the recovery is real but the ground is not yet firm," he said.

Meanwhile, the dollar index, which measures the US currency's performance against a basket of six major currencies, was trading 0.01% lower at 99.52.

Brent crude, the global oil benchmark, was down 0.37% at $78.67 per barrel in futures trade.

Domestic equity markets also opened higher, with the Sensex advancing 271.61 points to 77,080.09, while the Nifty rose 55.35 points to 24,044.50 in early trade.

Exchange data showed that foreign institutional investors remained net sellers on Tuesday, offloading equities worth Rs 749.18 crore.

In developments related to the Middle East peace deal, US President Donald Trump said that JD Vance would head the American delegation for the in-person signing of the peace deal with Iran in Switzerland on Friday. According to a senior US official quoted by The New York Times, both Trump and Vance have electronically signed the framework agreement with Iran's lead negotiator Mohammad Bagher Ghalibaf.