Rupee Recovers to ₹86.64/$ After Oil Price Eases – Will the Relief Last?
By CapitalKeeper | News | Indian Sock Market | Market Moves That Matter I 20th June 2025
💱 Rupee Recovers from Three-Day Slide: Opens at ₹86.64/$
📈 What Happened?
On June 20, 2025, the Indian Rupee opened at ₹86.64 against the US Dollar, marking a recovery after a three-day losing streak that had taken it as low as ₹86.92/$ in the previous session. This bounce comes on the back of a sharp correction in global crude oil prices and softer US Treasury yields.
🛢️ Key Trigger: Easing Crude Oil Prices
- Crude oil (Brent): Fell nearly 2.3% to $81.20/barrel on Wednesday as inventory build-up in the US and weaker Chinese economic data weighed on demand sentiment.
- Lower oil prices relieve pressure on India’s current account deficit and reduce forex outflows via oil import bills, supporting INR strength.
India imports ~85% of its oil needs, making crude one of the most sensitive variables for rupee volatility.
🌍 Global Cues Favor INR Rebound
- DXY (Dollar Index): Softened below 105 as markets begin pricing in a potential Fed rate cut in Q4 2025.
- US 10-year bond yield: Eased to 4.23% from 4.31%, leading to weakening dollar demand.
- Emerging market currencies including INR saw broad-based strength amid reduced dollar dominance.
💬 RBI’s Stance & Domestic Support
- The RBI has been actively intervening in spot and forward markets to contain sharp volatility.
- Strong domestic macros: May trade data showed a surprise drop in imports and a marginal improvement in services exports.
- FPI inflows into Indian equities (₹3,200+ crore this week) also provided rupee stability.
🧮 Technical View
- Support: ₹86.50
- Resistance: ₹86.85
- Short-Term View: Neutral-to-positive
- RSI trending near 48 suggests mild bullish reversal but not yet overbought.
📊 Outlook Ahead
Factors to Watch:
- Crude oil volatility amid Middle East tensions and Chinese economic uncertainty
- Upcoming US macro data (GDP revision, PCE inflation)
- Dollar movement and RBI’s policy tone in July
Currency Strategists Expect:
If oil stays below $82 and US yields soften further, the rupee may consolidate in the ₹86.40–86.75 band in the near term.
📌 Quick Summary
| Factor | Impact on INR |
|---|---|
| Crude Oil ↓ | Positive |
| US Yields ↓ | Positive |
| Dollar Index ↓ | Positive |
| FPI Flows ↑ | Supportive |
| RBI Intervention | Stabilizing |
🗣️ Final Thoughts
The rupee’s bounce from ₹86.92 to ₹86.64 is more than just a technical reaction—it reflects real macro relief, especially on the crude front. However, with global uncertainties looming, traders and businesses should hedge forex exposure cautiously and watch central bank signals closely.
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