The Indian rupee fell further on Tuesday, after it had started to rise yesterday, since the rise in crude oil prices kept the domestic currency weak. The Indian currency closed at 85.59 to one US dollar, which is down by 7 paise from where it stood on Monday. After the rupee ended four consecutive days of depreciation, the near-term hopes for stability ended quickly.
With the dollar value lower, the rupee depreciated due to soaring global oil prices, which worried people about India’s balance of trade and rising prices. Brent crude continued its rally from the previous day and was worth $64.74 per barrel, an increase of 0.17%, and WTI crude went up 0.27% to $62.69 per barrel at that time. OPEC+ members’ agreement to raise their output from July led to higher crude prices, since it showed there is more demand in the market.
According to market players, the Indian currency’s implied volatility decreased, which means there are lower odds of sudden rupee changes in the near future. There has been a big drop in the one-month implied volatility, which is now 5% compared to its peak of more than 7% in mid-May.
In addition, the dollar index, which follows the dollar’s performance against six leading currencies, advanced 0.21% to reach 98.91. Nonetheless, analysts think the index may still be under pressure, meeting strong resistance close to 99.80–100.00 and possibly sliding toward 98 or even 97.50 near-term.
International worries are rising, with the OECD reporting that the US is expected to slow down economically in 2025, with GDP growth of 1.6% compared to 2.8% in 2024. After former US President Donald Trump suggested a tariff hike, this brought renewed trade tensions.
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