Trump's Iran comments cool off oil rally, offering rupee respite

MUMBAI, June 20 (Reuters) - The Indian rupee is likely to open higher on Friday, buoyed by a decline in oil prices and a pullback in the U.S. dollar, while worries over the Israel-Iran conflict continue to linger.
Non-deliverable forwards suggest the rupee will open in the 86.60 to 86.64 range, compared to 86.7225 in the previous session. The local unit fell to an over three-month low on Thursday, pressured by a surge in crude prices and hedging by importers.
Brent crude futures were down 2%, having hit their highest level since mid-January on Thursday, amid the U.S. weighing whether to become involved in the Israel-Iran conflict.
President Donald Trump will decide in the next two weeks whether the U.S. will become involved in the Israel-Iran air war, the White House said.
This reduces speculation that the U.S. is planning to imminently join Israel in attacking Iran's nuclear facilities, ANZ Bank said, sparking a pullback in oil prices.
"A consistent drop in oil is the best support the rupee can have," an FX trader at a private bank said.
"The dollar's retreat, which is partly tied to reduced risk aversion, will help too. However, any meaningful rupee upside will need a material de-escalation in the Middle East conflict,' he said.
The dollar index was back below the 99 handle while most Asian currencies were higher.
The rupee, like most oil-sensitive Asian currencies, has been under pressure this week amid fears that a wider Middle East conflict could push oil prices higher and trigger a bout of risk aversion.
The rupee is down 0.75% this week through Thursday, putting it on track for its worst weekly performance in one-and-a-half months.
Brent crude, despite Friday's pullback, remained up nearly 4% for the week, adding to the nearly 12% surge it posted in the previous week.
KEY INDICATORS:
** One-month non-deliverable rupee forward at 86.74; onshore one-month forward premium at 9.25 paise
** Dollar index down at 98.64
** Brent crude futures down 2.3% at $77 per barrel
** Ten-year U.S. note yield at 4.39%
** As per NSDL data, foreign investors sold a net $69.2 mln worth of Indian shares on June 18
** NSDL data shows foreign investors sold a net $2.8 mln worth of Indian bonds on June 18

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Reuters

29 minutes ago

• Reuters

European shares rebound as worries of US involvement in Middle East ease

June 20 (Reuters) - European shares rebounded on Friday after three sessions of declines, as a stall in the United States' involvement in the Middle East conflict came as a relief to worried investors. The pan-European STOXX 600 (.STOXX), opens new tab was up 0.4% at 537.98 points at 0708 GMT. The benchmark is on track to log weekly declines for a second week. Israel and Iran's air war entered a second week and European officials sought to draw Tehran back to the negotiating table after President Donald Trump said any decision on potential U.S. involvement would be made within two weeks. The news improved market mood and helped recover some interest in risk assets that were being sold off during the week on uncertainty around how long the conflict would go on. In the market, travel and leisure stocks (.SXTP), opens new tab gained the most, up 1.1%, as oil prices eased. Conversely, energy shares (.SXEP), opens new tab were at the bottom of the index with a 0.7% decline, trimming some gains from this week. Among stocks, London's Berkeley (BKGH.L), opens new tab was the biggest percentage decliner, down 8%. The homebuilder named current finance chief Richard Stern as its new CEO, but reported an annual pre-tax profit slightly ahead of market expectations.

Reuters

an hour ago

• Reuters

US, Chinese strategic reserve buys may offset oil surplus, Russia's Gazprom Neft says

ST PETERSBURG, June 20 (Reuters) - U.S. and Chinese purchases for strategic oil reserves are expected to offset any potential global surplus, keeping oil prices in check, the head of the Russian oil producer Gazprom Neft ( opens new tab said on Friday. The eight members of OPEC+, which groups OPEC and other producers led by Russia, are unwinding voluntary production cuts and have agreed monthly increases for April through July, when they will meet to decide on August production. OPEC+ production growth in the coming months is unlikely to lead to market overstocking, said Alexander Dyukov, CEO of Gazprom Neft, the oil arm of Russian energy giant Gazprom ( opens new tab. It is also not expected to affect prices, he told journalists at an economic forum in Saint Petersburg. "The new U.S. administration has set the task of replenishing strategic oil reserves as soon as possible, which have fallen to about 400 million barrels - less than 20 days of consumption - with storage capacity of over 700 million barrels," he said. "China has announced that it will accelerate the replenishment of strategic fuel reserves planned for this year," he added.

Reuters

an hour ago

• Reuters

German car manufacturers incurred costs of half a billion euros in April due to tariffs, says VDA

BERLIN, June 20 (Reuters) - German car manufacturers are likely to have incurred costs of around half a billion euros in April due to import tariffs imposed by U.S. President Donald Trump, the head of the VDA auto industry lobby group said an interview published on Friday. "We have roughly estimated that German manufacturers probably incurred additional costs of around half a billion euros in their export business from Germany to the USA in April," Hildegard Mueller told the Funke media group.