The Indian rupee strengthened 11 paise to close at 95.86 against the US dollar on Tuesday (July 28, 2026), marking its third consecutive session of gains and continuing the momentum from Monday's sharp appreciation. The currency opened at 95.89 and touched an intraday high of 95.63 before settling at 95.86 (provisional), as reported by Business Standard. On Monday (July 27, 2026), the rupee had appreciated sharply by 54 paise to close at 95.99 against the US dollar, after rising 20 paise in the preceding session on Friday (July 24, 2026). The rupee emerged as the best-performing Asian currency on Monday, with the currency having recovered from its record low levels to settle 20 paise higher at 96.53 on Friday (July 24, 2026), with its all-time low closing level of 96.86 recorded on May 20. Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan, said the rupee strengthened on the halting of strikes between the U.S. and Iran, with traders taking cues from CB consumer confidence data from the U.S. The USD-INR spot price is expected to trade in a range of ₹95.35 to 96.05 in the near term, according to market analysts.
Brent crude prices rebounded 3.2% to $86.80 per barrel on Wednesday (July 29, 2026), recovering a portion of the previous session's losses after dropping over 14% in the last three sessions, as reported by Business Standard. US West Texas Intermediate (WTI) crude gained 3.4% to trade at $81.95 per barrel. The rebound was supported by a decline in US crude oil inventories and talks between US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu, as reported by The Hindu. In Washington, President Trump held talks with Israeli Prime Minister Benjamin Netanyahu as the US administration worked to prevent a fresh round of military strikes on Iran, with an Israeli spokesperson saying all sides preferred reaching a negotiated agreement rather than resorting to military action. Oil prices have remained volatile throughout the month, climbing sharply after renewed hostilities between the US and Iran and the expansion of the conflict into the Red Sea, before retreating as geopolitical tensions eased. The sharp correction in crude provided immediate relief to the rupee, while easing concerns over India's import bill and inflation after supply disruption fears linked to tensions in West Asia receded. The decline in oil prices was further fueled by reports that U.S. President Donald Trump is "giving talks some space," as confirmed by Mike Waltz, the U.S. ambassador to the United Nations.
The rupee's gains were limited by a stronger dollar index, which rose to 101.62 from the previous day's 101.28, as reported by Business Standard. The dollar index measures the strength of the greenback against a basket of six major currencies, with the rise attributed to investors awaiting US GDP growth and inflation data for cues on the future path of US interest rates. A dealer at a state-owned bank noted that "The RBI intervention was there since morning, and crude had softened, supporting the rupee," but added that "The dollar index was also up because of the US Fed meeting." Oil marketing companies stepped up dollar purchases by the end of trade, which helped the rupee give up some gains, according to market dealers. The rupee has depreciated by 1.09 per cent so far in the current financial year, while it has weakened by 6.24 per cent so far in the current calendar year. Since the West Asia conflict began, the currency has depreciated by 5.09 per cent. Despite Monday's rally, the rupee remains down 6.7% against the dollar so far in the current calendar year, making it one of the weaker-performing Asian currencies this year.
Government bond yields also softened, with the benchmark 10-year yield settling at 6.77 per cent, down 5 basis points (bps) against the previous close, as reported by Business Standard. The yield on the benchmark government bond has softened by 26 basis points so far in the current financial year of 2026-27 (FY27). The benchmark 6.94% 2036 bond yield was at 6.7767% as of 10:15 am, down from a closing level of 6.8253% on Friday, when it notched a second consecutive weekly rise. A trader with a primary dealership noted that easing crude prices have provided immediate relief to bonds, and bulls are taking the maximum advantage of this, because it may also proved to be short-lived, considering the recent past. The retreat in oil prices is likely to provide relief to the US economy by easing inflationary pressures and giving the Federal Reserve greater policy flexibility ahead of its interest rate decision on Wednesday. India's overnight index swap rates also saw a notable plunge in early trades, with the one-year swap rate at 5.89%, two-year rate at 6.10%, and the most liquid five-year rate dropping to 6.39%. Interest rate futures have assigned a 66% probability of a status quo in this meeting, with market widely expecting a rate hike in September, while the 10-year Treasury yield eased to 4.64%.
"The Indian rupee appreciated for the third consecutive session, supported by a decline in imported commodity prices and a steady supply of dollars from banks. Despite mixed cues from regional Asian peers, the domestic currency found firm backing as banks stepped in to meet opportunistic bargain buying from importers," said Dilip Parmar, senior research analyst at HDFC Securities, as reported by Business Standard. "From a technical standpoint, the spot rupee pair finds immediate support in the 95.60 to 95.40 range, while 96.15 per dollar continues to pose a key overhead hurdle," Parmar added. On the domestic equity market front, Indian shares ended a choppy session marginally lower on Tuesday, even as IT stocks surged as concerns over China's rising semiconductor capabilities coupled with Nvidia's AI infrastructure deals worth more than $750 billion sparked fears of an AI bubble and circular financing, as reported by Business Standard. The Indian benchmark indices ended largely flat today, with the NSE Nifty 50 marginally down by 10.60 points (0.04%) to close at 23,985.35, and the BSE Sensex slipping 69.86 points (0.09%) to settle at 76,765.92, as reported by Business Standard. Foreign Institutional Investors offloaded equities worth ₹1,688.23 crore on a net basis on Monday (July 27, 2026), according to exchange data. Both domestic benchmark indices started the day on a positive note, rebounding from a multi-day losing streak. The strong buying trend in domestic equities supported the local currency further, with forex traders noting the positive momentum across Asian stock markets as crude oil prices fell sharply and Middle East tensions eased over the weekend.
