The Indian rupee weakened to 94.53 against the dollar on June 29, down 13 paise from its previous close, as reported by Bloomberg. According to The Financial Express, the rupee moved within a narrow band during the day and ended 13 paise weaker at 94.53 against the dollar, with the currency opening at 94.36 and touching an intraday high of 94.25 before settling at 94.53. "Increased month-end demand for the dollar, coupled with a marginal rise in crude oil prices and a weakness in the domestic equity market, has contributed to the rupee's decline," said Dilip Parmer, research analyst at HDFC Securities, as reported by The Financial Express. With the pair not sticking to any one direction at the moment, short-tenor positions with tight stop-losses are preferable, as noted by a trader at a Mumbai-based bank. The rupee was the second worst-performing Asian currency on Monday, after the South Korean won, which fell 0.55%, while the Malaysian ringgit emerged as the top performer with a 0.43% gain, followed by the Indonesian rupiah, which rose 0.39%.
Brent crude oil prices rose 1.26% to $72.90 per barrel on Monday, as reported by The Financial Express, representing a significant increase from the previous session's $72.6 levels. As per Pinky Yadav, Commodity Fundamental Analyst at Choice Broking, the sharp decline in global crude oil prices, which fell below levels seen before the Iran conflict, is supporting the domestic currency. However, oil prices rose amid renewed tensions in the Middle East over the weekend, though the US and Iran later announced fresh round of peace talks, creating mixed signals for the currency. The rupee's recovery is also being driven by a weaker greenback and positive sentiments in the domestic equity markets. However, gains in the rupee remained capped as the US dollar hovered near a 13-month high and the risk of higher crude oil prices continues to weigh on the currency. According to The Financial Express, so far in the calendar year, the currency depreciated 5.19%, while over the past year, it has declined 9%.
Iran again launched drone and missile attacks targeting Bahrain and Kuwait on Sunday (June 28, 2026) following new U.S. airstrikes against the Islamic Republic, creating renewed geopolitical uncertainty that dented investor sentiment. Iran has threatened a 'complete halt' in negotiations to end the war if Washington continues its attacks, creating ongoing concerns about the stability of the region. Forex traders said the rupee opened on a positive note with crude oil prices remaining supportive and foreign inflows improving, but a renewed flare-up in geopolitical tensions after fresh military exchanges between the US and Iran dented investor sentiment. As per Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan, we expect the rupee to trade with a negative bias on renewed geopolitical tensions between the U.S. and Iran.
On the domestic equity market front, the Sensex dropped 372.10 points to settle at 76,728.37, while the Nifty declined 109.75 points to 23,946.25, according to Business Standard. On June 29, 2026, the Indian stock market snapped its two-day winning streak with the benchmark indices ending lower. Nifty 50 declined by 109.75 points (0.46%) to close at 23,946.25, while BSE Sensex slid by 372.10 points (0.48%) to close at 76,728.37. Foreign institutional investors purchased equities worth ₹383.76 crore on a net basis on Thursday, marking a significant shift from the previous session's outflows. As reported by PTI, heavy FII outflows prevented a sharper rise in the rupee, with foreign institutional investors offloading equities worth ₹1,843.40 crore on a net basis on Wednesday. The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 101.28, down 0.07%, as reported by The Hindu BusinessLine. According to Business Standard, market participants said lower oil prices and foreign portfolio inflows supported the domestic currency, even as most Asian peers weakened against the dollar.
Dilip Parmer from HDFC Securities noted that the rupee may see some appreciation after the month-end dollar demand gets stabilised, as reported by The Financial Express. "As long as the rupee is trading above 95, there are higher chances that it will move towards the 94-odd levels. However, we are seeing that the 94 is acting as a strong demand zone where either the traders or a bargain buyer can emerge. Therefore, the rupee is expected to trade in a broad range of 94-95 in the short term," Parmer explained. Amit Pabari from CR Forex said the rupee could face pressure in the coming sessions due to the strengthening US dollar, which is hovering near a 13-month high, and the risk of higher crude oil prices. Technically, 93.50–94.10 is a strong support zone, while a breakout above 94.80 could open the way towards 95.30–95.50, according to Pabari. India's forex reserves increased by $963 million to $672.587 billion during the week ended June 19, the RBI said on Friday, as reported by The Hindu BusinessLine*. USDINR spot price is expected to trade in a range of 94.20 to 94.80**, according to Mirae Asset ShareKhan.
