Rupee Opens At Two-Month Low As Israel-Iran Tensions Escalate

The Indian rupee opened 55 paise weaker at 86.15 against the US dollar on Friday, in comparison to its previous close of 85.60 on Thursday. This appreciation comes amid various global and domestic economic factors influencing the currency markets.

This is the lowest level since April 11.

Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, provided insights into the day's trading range and hedging strategies. According to him, the rupee is expected to trade in a range of 85.70 to 86.25.

"It could be an opportunity for exporters to sell their receivables, as RBI will surely step in to curb the volatility," said Bhansali.

He advised exporters need to hedge near 85.95 and importers to wait for hedging purposes.

Additionally, the US dollar fell to the weakest level in three years amid worries over US tariffs and the outlook for the US economy. This comes as data that showed US producer price inflation remained muted in May. Additionally, Israel hit dozens of Iranian nuclear sites.

The euro fell to 1.1548, the pound was lower at 1.3565, while the Japanese yen rose to 143.11. Amongst Asian currencies, the Chinese Yuan fell to 7.1770, the Indonesian Rupiah was at 16,272 and the South Korean Won was at 1,364.

On Friday, crude extended gains with Brent crude – the global benchmark for crude oil – rising 13.8% to $78.50 amid rising tensions in the Middle East. This comes after crude rose over 5% on Wednesday.

The US had ordered some of its staff to depart from the embassy in Baghdad after Iran threatened to attack US bases if talks over its nuclear program fall through.

However, the Brent crude had slipped below $59 in May, the lowest level since February 2021. In the last three months crude prices have tumbled to a four-year low amid US President Donald Trump's tariff wars.