Markets across the globe advanced after U.S. President Donald Trump predicted the war in the Middle East could end soon, even as Iran’s Revolutionary Guards said they would not let oil be shipped as long as U.S. and Israeli attacks continue.
Brent crude oil prices slipped 8% to below $90.8 per barrel, coming off highs of nearly $120 hit a day earlier.
The rupee gained right from the start of the local trading session, and dollar-selling intervention by the Reserve Bank of India reinforced the move, traders said.
The Asian currency ended at 91.8050, up 0.57% from the previous close and off its record low of 92.3475 per dollar. Indian stocks and bonds also rose with the equity benchmark index Nifty 50 up nearly 1%.
No client category dominated flows but, in general, large corporates have been “buying dips (on USD/INR),” an FX salesperson at a large foreign bank said.
Energy prices remain the key driver for FX markets at the moment, said Dilip Parmar, a foreign exchange research analyst at HDFC Securities. “While it’s difficult to forecast a range at the moment, the directional bias towards buying (USD/INR) on dips will likely persist,” Parmar said.
Worries about the spillovers of the Iran war have pushed up near-tenor volatility expectations on the rupee while also lifting the cost of hedging against further depreciation.
The rupee’s 1-month implied volatility, a gauge of future expectations, touched a peak of 6.4% on Tuesday, the highest since May 2025.
