The rupee recovered from 100 per US dollar in forward market and was trading at 96.43 on Thursday after US President Donald Trump indicated that negotiations with Iran were entering the final stages.
The one-year forward market rate for the rupee touched the crucial 100/USD mark on Wednesday, indicating that currency markets are pricing in a weakening bias for the USD/INR pair over the next 12 months, forex traders said.
Investors are still gauging the geopolitical risk and oil price sensitivity in the background, with any flare-up in the West Asia tensions or spikes in crude, they added.
At the interbank foreign exchange market, the rupee opened at 96.25 against the dollar, then touched an early high of 96.05 and a low of 96.60 in intraday trade on Thursday.
On Wednesday, one-year forward rate against the dollar crossed the psychologically significant 100-per-dollar threshold. In the spot market, the rupee made a new low of 96.95 and later closed at 96.86, which was also a new closing low.
The rupee had gained after chances of a trade deal increased, but could not sustain the gains, said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.
As per a US media report, US President Donald Trump and Israel’s Prime Minister Benjamin Netanyahu had a tense phone call over the future course of the war on Iran as Washington appeared to be in favour of a deal instead of the resumption of strikes.
After the Tuesday phone call with Trump, Netanyahu’s “hair was on fire,” US media outlet Axios reported on Wednesday, adding that the Israeli Prime Minister was keen on the resumption of strikes to further degrade Iran’s military capabilities and weaken the regime by destroying its critical infrastructure.
Trump on Sunday said he had put off strikes on Iran, planned for Tuesday, following a request from Arab nations, including Qatar and the UAE.
“The rupee has already weakened more than 6 per cent since the Iran conflict intensified, with rising crude oil prices adding fuel to the fire. On Wednesday, USDINR almost knocked on the doors of 97, touching fresh lifetime lows near 96.96,” CR Forex Advisors MD Amit Pabari said.
According to a research note by IFA Global, the USD/INR pair is likely to trade in a 96.60-97.10 range with a weakening bias. “Forwards got paid across the curve. 3m, 1y and 3y implied forward yields are at 3.73 per cent, 3.48 per cent and 3.44 per cent, respectively,” it added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 99.30, up 0.22 per cent.
Brent crude, the global oil benchmark, was trading up 0.95 per cent at $106.02 per barrel in futures trade.
On the domestic equity market front, Sensex fell 207.04 points to 75,111.35, while the Nifty was down 20.55 points at 23,638.15.
Foreign Institutional Investors offloaded equities worth ₹1,597.35 crore on a net basis on Wednesday, according to exchange data.
Published on May 21, 2026
