Indian Rupee Retreats on Firmer Dollar

The Indian rupee hovered around 94.6 per dollar, retreating from recent gains as the US dollar strengthened after the Federal Reserve concluded its latest policy meeting. Investors reassessed the interest-rate outlook after the Fed unanimously left its benchmark rate unchanged at 3.5%–3.75%, while updated projections signaled a notable shift in policymakers’ expectations. Further pressure on the rupee came as US Treasury yields climbed, with the two-year yield rising 12 basis points, supported by a series of resilient economic indicators that reinforced the case for higher-for-longer interest rates. Meanwhile, crude oil prices continued to move lower after the United States and Iran reached an interim agreement to halt the conflict and restore traffic through the Strait of Hormuz, easing concerns over energy supply disruptions.

The Indian rupee strengthened to around 94.4 per dollar, extending gains to multi-week highs as a sharp decline in crude oil prices improved India's import outlook. Brent crude fell below $80 per barrel after losing about 15% over the past four sessions, amid expectations that an interim US-Iran peace agreement could help normalize oil supplies and reduce disruptions to global energy flows. Additional support came from improved market sentiment ahead of the Federal Reserve's policy decision, where rates are widely expected to remain unchanged. However, gains in the rupee were tempered by weakness across Asian currencies and caution surrounding the implementation of the US-Iran deal. Investors also remained focused on upcoming trade discussions between India and the United States, with hopes that progress toward a bilateral agreement could support capital flows and strengthen economic ties. Over the past month, the rupee has gained roughly 1.2%.

The Indian Rupee touched 94.46 against the USD, the highest since May 2026. Over the past 4 weeks, US Dollar Indian Rupee lost 1.85%, and in the last 12 months, it increased 9.88%.