Rupee Closes Stronger Amid Declining Oil Prices

The Indian rupee closed 14 paise stronger at 86.59 against the US dollar on Friday, in comparison to its previous close of 86.73 on Thursday. The currency's advance comes amid ongoing market uncertainty and geopolitical tensions.

The domestic currency opened 10 paise stronger at 86.63 against the US dollar, after it hit a three-month low in the last session. "The Indian Rupee appreciated against the Dollar on Friday morning trade, aided by a decline in oil prices and a pullback in the US dollar," said Sriram Iyer, senior research analyst at Reliance Securities.

Rupee was trading in a bullish Elliott Wave pattern, supported by price holding above the 20-day SMA and an RSI near 67.59. It is also indicating strong momentum but nearing overbought territory, with a possible dip toward 86.35–85.95 before resuming an uptrend toward 87.80–88.00, said Ritesh Bhanshali, director, Mecklai Financial Service Ltd.

Additionally, the US dollar index dipped to 98.6. However, it held onto weekly gains as the ongoing Israel-Iran conflict supported safe-haven demand. This comes after news that US President Donald Trump will decide in the next two weeks whether the US will become involved in the Israel-Iran air war.

Brent crude—the global benchmark for crude oil—fell 2.12% to $77.18 after a volatile trading week supported by fears of supply disruption, despite Iran maintaining exports. Prices have fluctuated in a range of around $8 this week, with volatility spiking, options getting more bullish, and key spreads significantly widening in backwardation, according to Bloomberg.

The Brent crude had slipped below $59 in May, the lowest level since February 2021. In the last two months crude prices have tumbled to four year low amid Trump's tariff wars. However, Brent crude is expected to post its third weekly gain.