Indian Rupee Extends Rally, Opens Higher on Hopes of Iran Deal

Indian Rupee Extends Winning Streak on Hopes of Iran Deal

The Indian Rupee opened higher on May 25, marking its third consecutive day of gains, as optimism over a potential deal to end the Iran war boosted risk appetite and sentiment in the currency market. The Rupee's opening price of 95.35 per dollar was 35 paise higher than its previous close of 95.70.

The US and Iran's near-deal has been a major factor in the Rupee's recent gains, with traders anticipating a potential agreement that would ease tensions and stabilize global markets. However, US President Trump's comments that he is not in a rush for the Iran deal and that the US blockade of Iranian ports continues may have tempered some of the enthusiasm, according to Finrex.

Despite this, the Rupee is expected to continue its upward trend, with exporters likely to sell on any upticks and importers needing to buy dips to hedge their payables. Meanwhile, the U.S. dollar weakened during early Asian trading after optimism surrounding a potential reopening of the Strait of Hormuz pushed oil prices below the $100-per-barrel mark.

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The weakening of the U.S. dollar has had a positive impact on most Asian currencies, which have strengthened against the dollar. A comparison of the top performing currencies is as follows:

The Thai Baht recorded the highest gain among the Asian currencies, followed closely by the Malaysian Ringgit and South Korean Won. The Indian Rupee's gains, while significant, were not among the top performers in this group.