Rupee slips after one-day gain; ends 12 paise lower at 86.09/$

Indian Rupee today: The domestic currency closed 12 paise lower at 86.09, a day after closing at 85.97 against the dollar

Indian Rupee fell on Wednesday, a day after posting the best session of the year, as crude oil prices remained on the higher side, amid the ceasefire between Iran and Israel. 

 

The domestic currency closed 12 paise lower at 86.09, a day after closing at 85.97 against the dollar, according to Bloomberg. The unit posted the steepest one-day gains since May 23 on Tuesday, as it appreciated 78 paise. The unit is among the worst-hit Asian currencies this quarter, due to surging oil prices.

 

Tensions in West Asia were under control after US President Donald Trump criticised both nations for breaching ceasefire agreements, just hours after they were agreed upon. 

 

Following the ceasefire, crude oil prices fell almost 15 per cent over two sessions. However, Brent crude price was up 1.19 per cent at $67.94 per barrel, while WTI crude prices were higher by 1.20 per cent at 65.14, as of 3:30 PM IST.   

Market participants are now eyeing upcoming triggers from the US, including the PCE Price Index and GDP data, later this week, according to Jateen Trivedi, VP research analyst - commodity and currency at LKP Securities. "The rupee is expected to trade in a range of 85.70 to 86.25." 

Investors also await US government data on domestic crude and fuel stockpiles due on Wednesday. 

 

Dollar-rupee forward premiums rose as the Reserve Bank of India's announcement of a measure to withdraw excess banking system liquidity lifted near forwards, according to a Reuters report. The 1-year dollar-rupee implied yield rose 5 basis points to 1.94 per cent while the 1-month forward premiums ticked up to around 12 paisa, it added. 

 

Meanwhile, the dollar index edged higher after mixed rate-cut comments from Federal Reserve Chair Jerome Powell. Lower inflation and weaker labour hiring could lead to an earlier rate cut, Powell said, while the impact of trade tariffs has to be weighed. The US dollar index, which measures the greenback against a basket of six major currencies, was up 0.27 per cent at 98.12.

 

The dollar-rupee pair continues to trade within the 85–87 range, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. "Markets await the central bank's monthly report for the May 2025 REER and the current account data for the March 2025 quarter, which is expected to show a surplus."