Rupee tests 86 level; opens slightly lower amid easing West Asia tensions

Indian Rupee today: The domestic currency opened 3 paise lower at 86, a day after closing at 85.97 against the dollar

The Indian rupee opened slightly lower on Tuesday, as traders track developments in West Asia, while eyeing foreign inflows with one of India's biggest initial public offerings this year opening for subscriptions. 

 

The domestic currency opened 3 paise lower at 86, 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. 

 

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. Brent crude price was up 1.34 per cent at $68.04 per barrel, while WTI crude prices were higher by 1.46 per cent at 65.31, as of 9:05 AM IST.

 

   

The Indian Rupee strengthened on Tuesday, supported by inflows from HDB Financial Services' anchor investors, who raised ₹3,369 crore, partly from foreign capital, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP.  

 

With retail, high net worth individuals (HNIs), and other investors participating in the initial public offering (IPO) today, further foreign inflows could push the rupee toward 85.50, Bhansali said. "Importers may consider hedging between 85.80 and 85.50, depending on the extent of appreciation allowed by the Reserve Bank of India after yesterday’s sharp move. Exporters are expected to remain on the sidelines for now." 

 

The dollar-rupee pair continues to trade within the 85–87 range, Bhansali said. "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."

 

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 0.03 per cent at 97.88.

 

On Monday, Fed Vice Chair Michelle Bowman, however, had signalled openness to a potential rate cut in July if inflation remains subdued, prompting markets to price in around 55 basis points of easing by year-end.