The Indian rupee commenced the trading week on a positive note, gaining 40 paise to reach 95.20 against the US dollar in early Monday trade. The currency's strength was fueled by optimism in global markets, spurred by hopes of a potential peace agreement between the United States and Iran.
Rupee Opens Strong in Interbank Market
In the interbank foreign exchange market, the rupee opened at 95.36 against the US dollar before strengthening to 95.20 in early deals, marking a gain of 40 paise from its previous close. On Friday, the domestic currency had already demonstrated momentum, rising 75 paise to settle at 95.60 against the US dollar. This recovery comes after the rupee had depreciated by 6% since the Middle East crisis began on February 28, when the US and Israel launched joint strikes on Iran.
Expert Commentary on Currency Movements
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, commented, 'The trade deal will be beneficial to both the US and India.' He further noted that as Monday is a US holiday, dollar cash demand is expected to remain lower, although month-end demand could emerge. The Reserve Bank of India (RBI) is likely to remain watchful of dollar movements.
Peace Deal Hopes Drive Sentiment
The currency strengthened following signs that the US and Iran have 'largely negotiated' a peace pact aimed at ending the nearly three-month-long conflict. However, uncertainty persists at the leadership level. US President Donald Trump instructed negotiators 'not to rush into a deal' and emphasized that 'both sides must take their time and get it right'.
Trade Developments Between US and India
In parallel developments on the trade front, US Secretary of State Marco Rubio stated that the US and India are close to finalizing an interim trade agreement. This follows progress in discussions with the US Trade Representative, who is expected to visit India soon.
Dollar Index and Commodity Prices
Meanwhile, the dollar index, which measures the greenback against a basket of six currencies, declined by 0.20% to 99.04. In commodities, Brent crude, the global oil benchmark, dropped 5.43% to $97.92 per barrel in futures trade.
Positive Impact on Indian Stock Markets
Dalal Street also reflected the positive sentiments, with benchmark indices surging over 1% in early trade. The BSE Sensex jumped 908.98 points to 76,317.85, while the Nifty rose 262.65 points to 23,977.70.
