Rupee Opens Higher Against Dollar Amid Focus on U.S.-Iran Agreement

The Indian rupee began Tuesday’s session on a firmer note, gaining 8 paise against the U.S. dollar as market participants monitored developments surrounding the recently announced U.S.-Iran peace agreement and its effect on global commodity prices.

The domestic currency opened at 94.63 per U.S. dollar, compared with its previous close of 94.71. The move comes after crude oil prices retreated from recent highs, although Brent crude continued to trade above $83 per barrel.

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Trading Range in Focus

According to Finrex Treasury Advisors, the rupee is expected to trade within a band of 94.25 to 95.00 during the session, with the opening level seen around 94.60.

The advisory firm noted that exporters could consider hedging receivables on any rise in the USD/INR pair, while importers may continue covering requirements during declines within the projected range.

Market attention remains on whether the easing in geopolitical tensions can lead to a sustained correction in crude oil prices, a key factor for India’s external balances and currency movement.

Mixed Performance Across Asian Currencies

Asian currencies traded with a mixed bias against the U.S. dollar on Tuesday. The Indonesian Rupiah emerged as the strongest performer, appreciating 0.85% from its previous close. Japanese Yen appreciated by 0.08% while Chinese Renminbi appreciated by 0.07%.

The Thai Baht moved higher by 0.07% while Philippine Peso climbed higher by 0.12%. The Singapore Dollar was flat and moved by just 0.01%. As per weak performing currencies, the Malaysian Ringgit fell sharply by 0.16%. The Taiwan Dollar slipped 0.02%, while the South Korean Won remained largely unchanged with a marginal 0.01% decline.

Dollar Remains Near Recent Lows

The U.S. dollar stayed close to its lowest level in nearly 10 days as improved risk sentiment reduced demand for safe-haven assets. The euro traded at $1.159 after touching a 10-day high of $1.1622 in the previous session. The British pound was quoted at $1.3413 during early trade.

The dollar index, which tracks the U.S. currency against a basket of six major currencies, stood at 99.66. The index has risen about 2% since the conflict in West Asia began in late February, reflecting periods of heightened demand for the dollar amid geopolitical uncertainty.

Markets Await Further Clarity

Although the initial deal struck by Washington and Tehran has had a positive impact on market sentiments, further details are awaited by investors before forming a view on the direction of energy prices and inflation.

Market participants' focus is now moving towards key monetary policy decisions that are expected from important central banks such as the Japanese and Australian central banks.