Rupee Strengthens 52 Paise to 96.30 Against US Dollar Amid Crude and Bond Yield Declines

Indian Rupee Gains 52 Paise Amid Oil Price Drop and US-Iran Peace Deal Hopes

The Indian rupee opened 52 paise higher against the US dollar on Wednesday, as oil prices took a breather overnight following a statement from United States President Donald Trump that a peace deal between the US and Iran was in the final stages.

The local currency was trading at Rs 96.30 per dollar, a significant improvement from the previous trading session's rate of Rs 96.82 per dollar. This move marks a break from an eight-day losing streak, although the rupee still faces year-to-date losses of around 7 per cent.

Brent crude prices declined by approximately 5 percent overnight, trading near $105 per barrel, following President Trump's statement on the US-Iran peace deal. However, the President also warned that further attacks remain possible if talks fail, keeping traders cautious due to uncertainty. The drop in Brent crude prices also had a ripple effect on US Bond yields, with the 10-year bond yield easing below 4.6 percent due to slightly easing inflationary pressures.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

On the domestic front, the Reserve Bank of India (RBI) has announced a $5 billion buy-sell swap auction for a three-year tenor on May 26, aimed at injecting rupee liquidity into the banking system to manage volatility.

| Comparison of Brent Crude Prices and US Bond Yields | | --- | --- | | Brent Crude Price (previous trading session) | $110 per barrel | | Brent Crude Price (current trading session) | $105 per barrel | | US Bond Yield (previous trading session) | 4.7 percent | | US Bond Yield (current trading session) | 4.6 percent |

Market analysts expect the Rs 97.00 zone to act as an immediate resistance area for USDINR, while support may emerge around the Rs 95.50 – Rs 95.80 zone. However, as long as geopolitical tensions remain elevated, the broader pressure on the rupee will continue. RBI measures and liquidity support may help provide temporary relief and contain volatility in the near term.