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Informist, Wednesday, May 6, 2026

 

By Pratiksha

 

NEW DELHI – The rupee rose sharply against the dollar, posting its biggest gain in a day in almost five weeks, as crude oil prices slipped sharply after a report from Axios said the US and Iran were close to a deal to end the war in West Asia, dealers said. A fall in the dollar index and a sharp rise in domestic equities also supported the Indian unit, they said. 

 

"The market reacted mostly on the Iran war news. At this point, one can't predict at all which way rupee will go. Everything is dependent purely on oil headlines," a dealer at a state-owned bank said. 

 

The Indian currency snapped its five-day losing streak and settled at 94.6100 a dollar Wednesday, almost 0.7% higher from its previous close. This was the biggest single day gain for rupee since Apr. 2, when rare regulatory measures by the RBI helped it recover from record low ‌levels. Other Asian currencies gained 0.2-1.3% against the dollar, with the South Korean won being the best performer.

 

Crude oil prices slumped to near the key $100-per-barrel mark after news agency Axios reported citing US officials that the White House believed the US and Iran were close to an agreeement and had sent a one-page memorandum of understanding to Iran, expecting a response in 48 hours. Though nothing has yet been agreed, the report said this was the closest the parties have come to an agreement since the war began.

 

Crude oil prices were already on a declining path after US President Donald Trump Tuesday unexpectedly said he would briefly 

pause an operation to help escort ships through the Strait of Hormuz, citing progress toward a comprehensive agreement with Iran. Prices fell further and hit a near two-week low after the Axios report, boosting the rupee, dealers said. Brent crude oil futures for July delivery were at $101.80 a barrel at 1530 IST, sharply down from $109.87 a barrel Tuesday and $114.44 a barrel Monday.

 

Further, the dollar index also fell sharply as risk appetite among investors improved on hopes that a peace deal ‌may be reached to end the war with Iran, further supporting the rupee, dealers said. At 1530 IST, the dollar index was at 97.80, down from 98.49 Tuesday. 

 

Domestic equities gained sharply, with the Nifty 50 and Sensex ending 1.2% higher each, which also supported the Indian currency, dealers said. 

 

Earlier in the day, the Indian unit was also supported by hopes of strong measures by the Reserve Bank of India to draw foreign inflows to boost foreign exchange reserves and shore up the Indian currency, dealers said. Bloomberg Tuesday reported, citing sources, that the RBI was considering a plan for state-owned lenders to sell foreign-currency bonds to attract capital inflows, in order to support the rupee. RBI officials discussed a proposal that would see banks issue foreign-currency bonds, potentially with five-year maturities, the report said. The discussions are preliminary and no decision has been made yet, it said.

 

Some dealers said the impact from the said report was minimal on the rupee Wednesday as the RBI has not announced anything officialy yet. However, noting the recent sharp depreciation of the rupee and the sustained foreign outflows in the wake of the war in West Asia, calls for structural measures to support the balance of payments deficit have gained traction among market participants. The Indian currency had hit a record low of 95.4350 a dollar Tuesday. 

 

Earlier in the day, the Indian unit was weighed by persistent dollar purchases by banks on behalf of oil marketing companies and other importers, noting the sharp rise of rupee, dealers said. 

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	94.6100	95.0350	94.5600	95.1775	95.2800
1-year dlr/rupee fwd (paise)	290.67	300.33	300.33	290.67	307.85

 

FORWARDS

The one-year dollar-rupee forward premium ended sharply lower at a near two-week low Wednesday as the rupee's sharp rise prompted banks to sell dollars for forward delivery, fearing further appreciation of the Indian currency, dealers said. "Positive news on the war drove premiums lower naturally as the dollar-rupee was significantly down," a dealer at a private-sector bank said. 

 

Apart from the likely progress on the peace deal negotiations, market participants see the rupee appreciating as they expect strong measures by the RBI to mobilise dollar inflows to support the Indian currency. 

 

However, the fall in the forward premium was limited due to a decline in the 10-year US treasury yield as a fall in crude oil prices eased fear of inflationary risks, dealers said. The 10-year US bond yield eased to 4.43% Tuesday from 4.45% Monday. 

 

The one-year exact period dollar-rupee forward premium was 3.05% at 1530 IST, sharply lower than Tuesday's close of 3.23%. On an absolute basis, the premium was 290.67 paise, against 307.85 paise Tuesday. 

 

OUTLOOK

On Thursday, the rupee will continue to take cues from movement in crude oil prices amid evolving developments related to the West Asia war and the peace agreement between the US and Iran, dealers said. The local unit will also take cues from movement in the dollar index, they said.

 

"Oil will remain the main factor for rupee till the time the war situation cools down," a dealer at a foreign bank said. "If crude comes majorly below $100 tommorrow (Thursday) we may see rupee appreciating towards 94.00-94.10."

 

Market participants will watch out for any announcement by the central bank to spur foreign inflows into India and support the rupee. However, they expect importers to continue buying dollars, fearing depreciation of the rupee amid uncertainty over the situation in West Asia, which may weigh on the Indian currency. However, in case the rupee continues to appreciate, dealers expect exporters to step in to sell dollars, fearing further rise. 

 

"A softer crude outlook and improved capital market sentiment are currently acting as supportive factors for the rupee," Jateen Trivedi, VP research analyst - commodity and currency at LKP Securities, said in a note. "Technically, 95.00 now acts as immediate support, while 94.40 remains a key resistance zone, and a break below that could open the path towards 94.00."

 

Most dealers expect the RBI to intervene by selling dollars if the Indian unit comes under extreme pressure. However, they expect the central bank to not intervene aggressively, as has been the case recently. 

 

Dealers now see strong technical resistance for the Indian currency at 94.50 per dollar, a break of which may push the Indian unit to 94.30. The rupee is likely to move in a range of 94.40-95.00 against the dollar Thursday. 

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India Rupee: Premium falls as rupee's surge prompts fwd dlr sales by banks

 

	AT 1440 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	94.6800	95.0350	94.5650	95.1775	95.2800
1-year dlr/rupee fwd (paise)	292.166	300.333	300.333	291.250	307.850

 

MUMBAI – The one-year dollar-rupee forward premium fell sharply Wednesday as a sharp rise in the rupee prompted banks to sell dollars for forward delivery, fearing further appreciation of the Indian currency, dealers said. The rupee surged 0.5% against the dollar Wednesday as prices of crude oil fell sharply.  

 

"It's the spot dictating the move in forwards today. The forward curve is lower because dollar-rupee has come down," a dealer at a foreign bank said. The rupee rose to 94.8125 a dollar Wednesday. 

 

Market participants see the rupee appreciating more going ahead as they expect strong measures by the Reserve Bank of India to mobilise dollar inflows to boost foreign exchange reserves and support the Indian currency. Bloomberg Tuesday reported, citing sources, that the RBI was considering a plan for state-owned lenders to sell foreign-currency bonds to attract capital inflows, in order to support the rupee.

 

However, fall in the forward premium was limited due to a decline in the 10-year US treasury yield as a fall in crude oil prices eased fear of inflationary risks, dealers said.  The 10-year US bond yield eased to 4.43% Tuesday from 4.45% Monday. 

 

The one-year exact period dollar-rupee forward premium was 3.07% at 1440 IST, lower than Tuesday's close of 3.23%. On an absolute basis, the premium was 292.166 paise, against 307.850 paise Tuesday.  (Suryash Kumar)

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India Rupee: Surges after report US, Iran close to peace agreement

 

	AT 1440 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	94.6700	95.0350	94.5650	95.1775	95.2800

 

NEW DELHI – The rupee surged against the dollar after a report from Axios said the US and Iran were close to a deal to end the war in West Asia, dealers said. Citing US officials, the news agency reported that the White House believed the two sides were close to an agreeement and had sent a one-page memorandum of understanding to Iran, expecting a response in 48 hours. The rupee surged 0.6% against the dollar and hit a high of 94.5650 Wednesday. 

 

Brent crude oil prices fell further and hit a near two-week low after the report, supporting the rupee. Brent crude oil futures for July delivery were at $103.80 a barrel at 1440 IST, down sharply from $109.87 a barrel Tuesday and $114.44 a barrel Monday.

 

A further fall in the dollar index also boosted the Indian currency, they said. At 1440 IST, the dollar index was at 97.80, down from 98.49 Tuesday. A sharp rise in domestic equities also supported, they said. 

 

For the rest of the day, the rupee is seen moving in the range of 94.50-95.00. Dealers see immediate technical resistance for the rupee at 94.50 a dollar. (Pratiksha)

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India Rupee: Erases some gains on strong dollar buys by oil cos, importers

 

	AT 1209 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	95.1300	95.0350	94.9500	95.1775	95.2800

 

 

MUMBAI – The rupee erased some early gains against the dollar Wednesday as banks persistently bought dollars on behalf of oil marketing companies and other importers, noting the relatively lower dollar-rupee levels, dealers said. "In morning there was heavy selling (of dollars) as the rupee appreciated, but now the market has tilted towards buying dollars. The demand for dollars is mainly coming from oil importers," a dealer at a foreign bank said.

 

The rupee opened 25 paise higher at 95.0350 a dollar Wednesday and went on to touch a high of 94.9600 shortly afterwards as crude oil prices declined after US President Donald Trump said peace talks between the US and Iran were progressing well. Trump also announced the halting of "Project Freedom", which was an attempt by the US to reopen the Strait of Hormuz. Brent crude oil futures for July delivery were at $108.46 a barrel at 1230 IST, down from $109.87 a barrel Tuesday and $114.44 a barrel Monday. 

 

Further, dealers said reaction to the Bloomberg report Tuesday saying the Reserve Bank of India was considering a plan for state-owned lenders to sell foreign-currency bonds to attract capital inflows was limited on the Indian unit for now, as no final announcement on that front has been made yet. 

 

For the rest of the day, the rupee is seen moving in the range of 94.90-95.30. Dealers see immediate technical resistance for the rupee at 94.90 a dollar. (Suryash Kumar)

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India Rupee: Technical levels for rupee - May 6

 

MUMBAI – At 1106 IST, the rupee was at 95.0800 a dollar. At 0900 IST, the rupee was at 95.0350 a dollar, against the previous close of 95.2800. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

 

 

Participants	S2	S1	R1	R2
Private bank	95.15	-	94.90	-
Foreign bank	95.20	-	94.90	-
Public sector bank	95.50	95.35	94.80	94.60
Brokerage firm	95.50	95.20	94.75	94.50

 

(Pratiksha and Suryash Kumar)

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India Rupee: Sharply up as oil prices, dlr fall on hope of US-Iran peace deal

 

	AT 1007 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	95.0725	95.0350	94.9600	95.1025	95.2800

 

 

MUMBAI – The rupee rose sharply against the dollar Wednesday as crude oil prices fell below the $110 per barrel mark after US President Donald Trump indicated a possible peace deal ‌may be reached to end the war with Iran, dealers said. Trump Tuesday announced halting "Project Freedom," which was the US' effort to reopen the Strait of Hormuz, citing "great progress" towards a comprehensive agreement with Iran. 

 

"Some cushion is there and there's an uptick in selling (of dollars) as oil came down a bit," a dealer at a private bank said. Brent crude oil futures for July delivery were at $108.05 a barrel at 0820 IST, down from $109.87 a barrel Tuesday and $114.44 a barrel Monday. A fall in the dollar index also aided the rupee, they said. 

 

Further, expectation of strong measures by the Reserve Bank of India to mobilise dollar inflows to boost foreign exchange reserves and support the Indian currency also supported the Indian unit. Bloomberg Tuesday reported, citing sources, that the RBI was considering a plan for state-owned lenders to sell foreign-currency bonds to attract capital inflows, in order to support the rupee.

 

"The plan is yet to materialise. Long term will be positive if we can raise good amount, but it's just a news right now," a dealer at a private bank said.

 

However, gains for the Indian unit were limited as banks stepped in to buy dollars on behalf of importers, noting the relatively lower dollar-rupee levels, dealers said. "There's buying of dollars as importers, especially oil importers, look to buy dollars with the rupee appreciating," a dealer at a private-sector bank said. The rupee opened 25 paise higher at 95.0350 a dollar Wednesday and went on to touch a high of 94.9600 shortly afterwards.

 

For the rest of the day, the rupee is seen moving in the range of 94.90-95.30. Dealers peg immediate technical resistance for the rupee at 94.90 a dollar. (Suryash Kumar)

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India Rupee: Expected range for rupee - May 6

 

NEW DELHI – Following are the support and resistance levels expected for the rupee Wednesday, as forecast by leading banks and brokerages in an Informist Poll:

 

PARTICIPANT	SUPPORT	RESISTANCE
Public-sector bank	95.35	94.80
Private-sector bank	95.50	94.80
Foreign bank	95.25	94.65
Brokerage firm	95.22	94.92
Brokerage firm	95.28	94.88
Brokerage firm	95.25	94.75

 

 

 

 

 

 

     

 

 

Compiled by Pratiksha 

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India Rupee - Asia FX: Most up as crude falls on optimism over US-Iran deal

 

MUMBAI – Most Asian currencies rose against the dollar in early trade Wednesday as the US announced pausing the military operations by its navy in the Strait of Hormuz, citing progress toward a comprehensive agreement with Iran. This calmed the nerves of investors who were on edge about the continuity of the ceasefire as Iran attacked ships and its neighbour the United Arab Emirates after the US launched "Project Freedom" to guide ships out of the Strait of Hormuz.

 

Trump Tuesday also said that the pause was "based on the request of Pakistan and other countries", as well as the "tremendous military success" and "great progress" toward an agreement. A fall in crude oil prices and the dollar index also supported the Asian units. Brent crude oil futures for July delivery were at $108.05 a barrel at 0845 IST, down from $109.87 a barrel Tuesday and $114.44 a barrel Monday. 

 

The South Korean Won led the gains among Asian basket of currencies, up over 1% against the dollar, after data Wednesday showed inflation rose in April at ‌the steepest pace in nearly two years on a surge in oil prices due to the West Asia conflict. This raised the prospects of interest rate hikes by the central bank in the year's second half to curb inflation pressures. The consumer price index rose 2.6% on year in April, after rising 2.2% in March, in line with the median forecast in a Reuters poll. 

 

The Malaysian ringgit rose 0.3% against dollar ahead of a policy decision by Bank Negara Malaysia Thursday. The central bank is expected to maintain the overnight policy rate at 2.75%. This would mark the sixth consecutive meeting where the bank has chosen to hold. 

 

The Thai Baht was up 0.1% against the dollar while the Taiwanese dollar was up 0.2% against the dollar. Hong Kong dollar was marginally lower against the dollar. 

 

The Chinese yuan was up 0.1% against the dollar after data Wednesday showed China's ‌services activity expanded at a faster pace in April. The RatingDog China General Services purchasing managers' index rose to 52.6 in April from 52.1 in March, staying above the 50-mark that separates expansion from contraction. (Suryash Kumar)

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Vandana Hingorani

 

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