Rupee Posts Strongest Opening in Over a Month on Iran-Israel Ceasefire Hopes, Rises 64 Paise to ₹86.11

The Indian rupee opened sharply higher at ₹86.11 against the US dollar on June 24, 2025, marking its best opening in over a month. The domestic currency gained 64 paise from Monday’s close of ₹86.75, buoyed by optimism over a tentative ceasefire between Iran and Israel announced by US President Donald Trump. This development eased geopolitical tensions that had previously weighed heavily on the rupee and crude oil prices.The increase represents a significant rebound after the rupee’s recent volatility, which saw it fall to a five-month low of ₹86.78 on Monday. Despite the gains, the rupee has depreciated 0.61% so far this month amid ongoing global uncertainties.

Crude Oil Prices Retreat, Easing Inflation Concerns

Brent crude prices fell 4.00% to $68.52 per barrel, while WTI crude declined 4.28% to $65.58 per barrel in early Asian trade. The sharp drop followed a 7% fall on Monday after Iran’s limited missile retaliation on a US base. Lower oil prices reduce India’s import bill and inflationary pressures, providing relief to the rupee. Market participants welcomed the ceasefire announcement, although Iranian officials have yet to confirm a formal truce. The easing of risk premium on oil has been a key driver behind the rupee’s recovery.

Dollar Index Weakens on Fed Dovish Signals

The US dollar index, which measures the greenback against a basket of six major currencies, dropped 0.28% to 98.13. Dovish signals from the US Federal Reserve, including hints of a potential rate cut as early as July by Vice-Chair Michelle Bowman, contributed to the dollar’s weakness. A softer dollar typically supports emerging market currencies like the rupee.

Equity Markets Rebound on Risk-On Sentiment

Domestic equity markets reflected the improved risk appetite, with the BSE Sensex increasing 930 points to 82,827.49 and the Nifty rising 279 points to 25,250.85 on June 24. Foreign institutional investors (FIIs) were net buyers of Indian equities, injecting ₹5,591.77 crore on Monday, signaling confidence in the market’s recovery.

Conclusion

The Indian rupee’s best opening in over a month reflects a welcome easing of Middle East tensions and a sharp decline in crude oil prices. Coupled with a weaker US dollar and robust domestic equity inflows, the rupee has room to strengthen in the near term. However, persistent geopolitical uncertainties and upcoming US Fed policy announcements are likely to keep volatility elevated. Investors and policymakers will closely monitor these developments as they navigate a cautiously optimistic market environment.

Disclaimer: This news is solely for educational purposes. The securities/investments quoted here are not recommendatory.

To read the RA disclaimer, please click here