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Indian rupee rises versus dollar as Middle East de-escalation hopes grow
USD/INR pulled back from Monday's two-month high of 96.76 to trade near 96.34, while oil steadied after hopes of a 10-day ceasefire between the US and Iran.
The Indian rupee strengthened against the US dollar on Tuesday, with USD/INR correcting to around 96.34 from Monday's two-month high of 96.76, FXStreet reported.
The move was linked to rising hopes for de-escalation in military aggression between the US and Iran. FXStreet said expectations for Middle East peace helped pause an oil rally, which can support currencies such as India’s that are heavily dependent on imported oil.
FXStreet also pointed to signs that negotiations may remain active. It cited a senior Iranian official confirming that mediators received a proposal for a 10-day cessation of strikes to revive an interim deal with the US, and noted that renewed peace hopes could keep upside in oil prices limited, although renewed attacks could raise global volatility.
Separately, FXStreet reported that Foreign Institutional Investors extended their selling streak in India for a sixth straight day on Monday, cumulatively cutting holdings worth Rs. 10,240.80 crore over the prior six sessions. The outlet tied the cautious sentiment to the ongoing Q1FY27 earnings season and expectations around Long-Term Capital Gains tax policy, saying India’s finance ministry stated there is no plan to scrap the LTCG tax.