The Indian rupee opened 14 paise stronger at 95.55 against the US dollar on Friday, 29 May, supported by reports that the United States and Iran have agreed to extend the ongoing ceasefire. However, traders remained cautious, as previous claims of breakthroughs in negotiations have repeatedly failed to translate into concrete resolutions.
According to a Reuters report, dollar outflows linked to global equity index adjustments are expected to remain a pressure point for the domestic currency during the session.
At the same time, crude oil prices declined amid optimism regarding US-Iran negotiations. Brent crude futures set for July delivery, which expire on Friday, dropped by 1.1% to $92.6 per barrel, while the more actively traded August contract fell by 1% to $91.7 per barrel.
Nonetheless, remarks from US Vice President JD Vance suggesting that both countries were “close” to reaching an agreement but “not there yet” helped to limit the drop in oil prices. The Trump administration has repeatedly claimed that a deal was imminent, though Iran has frequently downplayed or contested those claims.
Further, according to the PTI report, traders suggest that a weaker dollar and consistent oil prices could offer some short-term support for the rupee. Nonetheless, the rupee’s primary obstacle at the moment is the lack of foreign investment.
Since the start of 2026, foreign institutional investors (FIIs) have withdrawn nearly USD 24 billion from the Indian stock markets. In contrast, the debt market has experienced relatively steady inflows of approximately USD 1 billion.
According to exchange data, foreign institutional investors sold equities amounting to ₹1,042.70 crore on a net basis on Wednesday.
Rupee Outlook
According to Ponmudi R, CEO of Enrich Money, USD/INR is currently trading below ₹95.60, consolidating within the broader ₹95.60– ₹95.80 range as the pair attempts to stabilise following a technical rebound from the lower end of its long-term ascending trendline.
However, the formation of a gravestone doji in the previous session points to fading bullish momentum and signals the possibility of a near-term bearish reversal. Technically, immediate resistance is placed in the ₹95.67– ₹95.80 zone. A sustained move above this range would negate the near-term weakness and could once again extend rupee depreciation towards the ₹96 mark.
“On the downside, the ₹95.40– ₹95.20 region continues to act as an important support area and also coincides with the base of the broader ascending trendline structure. A decisive break below the ₹95– ₹94.80 zone would confirm the emerging bearish bias in USD/INR and place the longer-term trend structure under increasing pressure. Overall, the near-term bias remains cautiously bearish for USD/INR, with evolving geopolitical developments and shifts in global risk sentiment likely to remain the primary drivers of direction in the coming sessions,” said Ponmudi.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
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