Rupee Strengthens as Oil Eases and Foreign Investors Return

Written by Sandra Leggero

Sandra Leggero has a background in financial markets, having spent more than 9 years in commodities trading for several European and Asian companies. She holds a degree in Economics from the University of Pavia and specializes in emerging markets.

, | Updated: June 16, 2026

Key Moments

USD/INR trades near 94.58. The rupee gains support from softer crude prices and better foreign inflows.
The reopening of the Strait of Hormuz follows a US-Iran peace deal. As a result, oil prices remain under pressure, which helps India as an importer.
Markets now await the Federal Reserve decision. Rates are expected to stay in the 3.50%–3.75% range.

Rupee Firms on Oil Relief and Risk Sentiment

The Indian Rupee (INR) trades stronger against the US Dollar (USD) on Tuesday. USD/INR sits near 94.58. Lower crude prices support the move. In addition, foreign investor sentiment has improved.

Oil prices ease after the Strait of Hormuz reopens. This follows a peace agreement between the United States and Iran. At the same time, foreign institutional inflows support the rupee further.

MCX crude oil futures for June 18 rise slightly to 7,640. However, they remain near Monday’s eight-week low of 7,550. For India, lower oil prices help reduce import costs. Therefore, the rupee benefits.

US-Iran Peace Deal and Hormuz Reopening

US President Donald Trump announced a peace deal with Iran on Monday. He also said the Strait of Hormuz has reopened. However, full details are still pending.

Markets now wait for clarity on shipping terms. In particular, investors want to know whether passage remains toll-free. If traffic normalizes, oil supply should stay stable. This would support the rupee.

Foreign Investors Turn Net Buyers

Foreign Institutional Investors (FIIs) turned net buyers of Indian equities on Monday. This is the first positive session in June. Earlier in the month, they sold Rs. 46,430.42 crore in equities.

FIIs bought Rs. 200.05 crore on Monday. This shift suggests a mild return of risk appetite. In addition, the US-Iran deal helped ease global uncertainty.

FII Activity (June)	Amount (Rs. crore)
Cumulative selling (first two weeks)	46,430.42
Net buying (Monday)	200.05

Fed Decision in Focus

The US Dollar now awaits the Federal Reserve decision on Wednesday. Markets expect no change in rates. The Fed is likely to keep the range at 3.50%–3.75%.

Investors will focus on forward guidance from Chair Kevin Warsh. They will also watch updated economic projections.

According to CNBC, President Trump said Warsh has full freedom on policy. He added that he should “do whatever he wants.” This marks a shift from earlier criticism of Fed policy under Jerome Powell.

USD/INR Technical Picture: Bias Still to the Downside

USD/INR trades near 94.58 and stays under pressure. It remains below the 20-day EMA at 95.2580. This keeps the short-term bias negative.

The RSI stands at 42.6. It sits below the neutral 50 level. This signals weak momentum and limits upside.

A move above 95.26 would ease selling pressure. It could open the way toward 96.00. On the downside, a break below 94.43 may extend losses toward 94.03.