The Indian rupee opened higher on May 29 following reports that the United States and Iran have agreed to extend their ceasefire, raising hopes of easing geopolitical tensions and softer crude oil prices. However, traders remained cautious as several similar developments in recent weeks have failed to deliver a lasting resolution.
Indian rupee opened higher by 12 paise at 95.57 per dollar on Friday against Wednesday’s close of 95.69.
According to Finrex, the rupee had fallen to below 96 after reports of fresh attacks by US over Iran but reports of a deal between the two countries for a period of 60 days with reportedly opening of the Strait of Hormuz brought rupee to 95.82 levels. However, nothing is confirmed as Iran has not confirmed the contents of the deal as yet.
Finrex further stated that, the Rupee remains vulnerable to any rise in oil prices due to the Iran war. Exporters are again getting a chance to sell their near term exports while importers need to wait to hedge their imports though the dips can be bought for the cash/very near term imports.
The range for the day can be expected between 95.25 to 96.25 with all eyes on the Iran-US peace deal as also RBIs reaction to any weakness in the rupee, it added.
The dollar extended its weakness against major currencies on Friday and was on track to end the week lower, after reports the U.S. and Iran reached an agreement to extend the ceasefire in the Middle East and lift restrictions on shipping through the Strait of Hormuz.
Most of Asian currencies weakened slightly, with the South Korean Won recorded the biggest decline among the listed currencies, falling 0.427%, followed by the Indonesian Rupiah which is down by 0.252%. The Japanese Yen remained almost flat with a marginal fall of 0.019% and the Singapore Dollar also traded nearly unchanged, slipping just 0.016%.
On the positive side the Philippines Peso gained the most, rising 0.353%, followed by the Malaysian Ringgit, which is appreciated by 0.351%. The Thai Baht advanced 0.258%, while the Taiwan Dollar and China Renminbi posted modest gains of 0.102% and 0.053% respectively.
