Rupee rises 10 paise to close at 94.50 against US dollar

MUMBAI: The rupee appreciated 10 paise to close at 94.50 (provisional) against the US dollar, as Brent crude oil prices and the US dollar index retreated further from their elevated levels.

Forex traders said the rupee opened on a positive note as Brent crude has fallen below USD 79 per barrel, with markets pricing in the reopening of the Strait of Hormuz following the US-Iran peace framework.

Moreover, positive domestic equities supported investor sentiments further.

At the interbank foreign exchange, the rupee opened at 94.46 against the US dollar and traded in the range of 94.29-94.60. Eventually, it settled at 94.50 (provisional), up 10 paise from its previous close.

On Tuesday, the rupee ended 2 paise lower at 94.60 against the US dollar.

In the past four trading sessions, the USD/INR pair has gained over 140 paise against the US dollar.

Forex traders said that with oil prices moving in India's favour and foreign inflows remaining supportive, the near-term outlook for the rupee remains positive.

"We expect the rupee to trade with a positive bias amid positive global market sentiments and softening of crude oil prices. Decline in the US dollar and softening of US Treasury yields may also support prices," said Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan.

Choudhary further noted that "investors may remain cautious ahead of the US Federal Reserve's interest rate decision. The Fed is likely to keep rates unchanged. USD-INR spot price is expected to trade in a range of 94.10 to 94.85.

CR Forex Advisors MD Amit Pabari said 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 gauges the greenback's strength against a basket of six currencies, was trading at 99.57, higher by 0.03 per cent.

Brent crude, the global oil benchmark, was trading down 0.08 per cent at USD 78.90 per barrel in futures trade.

On the domestic equity market front, Sensex climbed 347.14 points to settle at 77,155.62, while the Nifty was up 96.55 points to 24,085.70.

Foreign institutional investors offloaded equities worth Rs 749.18 crore on a net basis on Tuesday, according to exchange data.

In global developments, Vice President J D Vance will lead the US delegation for the in-person signing of the peace deal with Iran in Switzerland on Friday, President Donald Trump said.

Both Trump and Vance have electronically signed the framework agreement with Iran's lead negotiator Mohammad Bagher Ghalibaf, according to a senior US official quoted by The New York Times.