Quite unexpectedly, the day’s roller-coaster of Iran-Israel ceasefire announcement and violations crashed the global crude oil prices.
The rupee recovered from its previous record low level and surged 75 paise to close at 86.03 (provisional) against the US dollar as hopes of de-escalation in the Middle East tensions triggered positive sentiments in the domestic equity markets.
Forex traders felt a weak greenback also boosted the local unit even as Brent crude, the global oil benchmark, plummeted 3.19 per cent to USD 69.20 per barrel in futures trade as the morning started off with US President Donald Trump’s announcement of a ceasefire between Iran and Israel.
At the interbank foreign exchange, the local unit opened at 86.07 against the US dollar and traded in the range of 85.91-86.27 before closing at 86.03 (provisional).
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On Monday, the local unit had plunged 23 paise to close at a five-month low of 86.78 against the US dollar.
Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee gained on improved global risk sentiments when reports emerged of a ceasefire between Israel and Iran.
A sharp decline in crude oil prices and positive domestic markets also seems to have favoured the rupee, while the dollar index softened amid the ceasefire reports, he added.
Going forward, Choudhary said, traders may take cues from US consumer confidence and Federal Reserve Chair Jerome Powell's testimony.
"USD-INR spot price is expected to trade in a range of Rs 85.60-86.40."
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.48 per cent lower at 97.94.
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