Pointers
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Rupee rose by 65 paise to ₹86.13 vs USD in early trade (June 24).
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Triggered by Trump’s announcement of an Iran-Israel ceasefire.
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Crude oil prices fell 2.73% to $69.53, reducing import pressure.
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US dollar index weakened to 98.13, aiding rupee strength.
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Sensex surged 930 pts, Nifty up 279 pts, boosting market sentiment.
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The rupee had earlier fallen to a 5-month low (₹86.78) on June 23.
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Fed Chair Powell’s speech now awaited for global rate direction.
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Analysts say rupee outlook depends on geopolitical stability, oil, and Fed cues.
The Indian rupee surged by 65 paise to ₹86.13 against the US dollar in early trade on Tuesday, supported by easing crude oil prices, a weaker dollar, and a strong rebound in domestic equity markets. The sudden appreciation comes after reports of a possible ceasefire between Iran and Israel, announced by former U.S. President Donald Trump.
At the interbank foreign exchange, the rupee opened at ₹86.07, briefly dipped to ₹86.13, but still recorded a sharp recovery from Monday’s close of ₹86.78, which marked a five-month low.
Ceasefire Sentiment Cools Oil Prices
According to traders, Trump’s claim that a ceasefire deal had been reached—though not yet confirmed by Iran—has led to an immediate reaction in global markets. One of the key effects was a 2.73% drop in Brent crude, which traded at $69.53 per barrel, falling below the crucial $70 mark.
“The market has taken the ceasefire announcement seriously, with oil prices falling sharply and the rupee gaining,” said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP.
Weaker Dollar Boosts Emerging Market Currencies
The US dollar index, which measures the greenback’s strength against six major global currencies, was down 0.29% at 98.13, adding further tailwinds to the rupee’s strength.
“USDINR dropped close to 86.00 levels as soon as the news broke. Now, all eyes are on Fed Chair Jerome Powell’s testimony to the US Senate and House for signals on possible rate cuts,” Bhansali added.
📈 Sensex, Nifty Bounce Back Strongly
Indian equity markets rebounded sharply after Monday’s slide:
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Sensex gained 930.7 points, climbing to 82,827.49
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Nifty jumped 278.95 points to reach 25,250.85
This rally added to positive sentiment around the rupee, reinforcing confidence in broader market stability amid cooling geopolitical fears.
FIIs Still Net Sellers, but Rupee Finds Relief
Despite the rupee’s gain, foreign institutional investors (FIIs) remained net sellers on Monday, offloading equities worth ₹1,874.38 crore, according to exchange data. However, the bounce in the rupee and equities shows that global cues are currently overpowering domestic outflows in driving short-term currency strength.
Outlook Hinges on Fed Commentary and West Asia Stability
While today’s gains are a welcome relief for the rupee, market participants remain cautious. The sustainability of the rally will depend on:
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Confirmation and durability of the Iran-Israel ceasefire
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Fed’s rate commentary this week
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Continued decline in oil prices
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Foreign fund flows into Indian assets
As of now, the rupee seems to have found short-term support, but its direction will still be shaped by events far beyond India’s borders.
