The rupee recovered 41 paise from its all-time closing low to 96.45 against U.S. dollar in early trade on Thursday (May 21, 2026), after U.S. President Donald Trump indicated that negotiations with Iran were entering the final stages.

Investors are still gauging the geopolitical risk and oil price sensitivity in the background with any flare-up in West Asia tensions or spikes in crude, forex traders said.

At the interbank foreign exchange market, the rupee opened at 96.25 against the U.S. dollar, then touched 96.45 in early trade, up 41 paise from its all-time lifetime low of 96.86 against the U.S. dollar on Wednesday (May 20, 2026).

On Wednesday (May 20, 2026), the rupee made a new low of 96.95 and later closed at 96.86 which was also a new closing low as demand for dollars continued with dollar index higher and crude oil prices remaining on the higher side near to $110 during the day.

“From a technical perspective, the 97.00 zone is expected to act as an immediate resistance area for USD-INR, while support may emerge around the 95.50–95.80 zone,” CR Forex Advisors MD Amit Pabari said.

Pabari further added that as long as geopolitical tensions remain elevated, the broader pressure on the rupee is likely to continue. RBI measures and liquidity support may help provide temporary relief and contain volatility in the near term, he said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 99.18, up 0.09%.

Brent crude, the global oil benchmark, was trading up 0.71% $105.77 per barrel in futures trade.

On the domestic equity market front, Sensex climbed 327.74 points to 75,646.13 in early trade, while the Nifty was up 111.75 points to 23,772.05.

Foreign Institutional Investors offloaded equities worth ₹1,597.35 crore on a net basis on Wednesday (May 20, 2026), according to exchange data.

As per U.S. media report, U.S. President Donald Trump and Israel’s Prime Minister Benjamin Netanyahu had a tense phone call over the future course of the war on Iran as Washington appeared to be in favour of a deal instead of the resumption of strikes.

After the phone call with Trump, Mr. Netanyahu’s “hair was on fire”, U.S. media outlet Axios reported on Wednesday (May 20, 2026), adding that the Israeli Prime Minister was keen on the resumption of strikes to further degrade Iran’s military capabilities and weaken the regime by destroying its critical infrastructure.

Mr. Trump had said he had put-off strikes on Iran, planned for Tuesday (May 19, 2026), following a request from Arab nations including Qatar and the UAE.

The rupee depreciated 7 paise to close at a record low of 90.97 (provisional) against the U.S. dollar on Tuesday (January 20, 2026), as strong dollar demand from metal importers and persistent foreign fund outflows dented investor sentiment.

Forex traders said rising geopolitical uncertainties, including renewed U.S. expansionary signals, have increased risk aversion and kept emerging market currencies under pressure.

Moreover, a sluggish domestic stock market triggered by an exodus of foreign capital further weighed on the local unit, they said.

At the interbank foreign exchange, the rupee opened at 90.91 and lost ground, touched an intraday low of 91.06, and finally ended the day at an all-time low of 90.97 (provisional) against the American currency.

On Monday (January 19, 2026), the rupee depreciated by 12 paise to close at 90.90 against the greenback.

On December 16, 2025, the rupee reached its lowest intra-day level of 91.14 and its previous lowest closing level of 90.93 against the American currency.

“The Indian rupee traded with a negative bias and slipped below the 91-mark on risk aversion in global markets and persistent FII outflows. However, a weak dollar and intervention by the RBI prevented a sharp fall,” said Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan.

Mr. Choudhary further noted that the rupee is expected to trade with a negative bias on foreign fund outflows and risk aversion in global markets over the U.S. stance on Greenland.

“Uncertainty over trade deal talks may also pressurise the rupee. However, a weak dollar and any RBI intervention may support the rupee at lower levels. USD-INR spot price is expected to trade in a range of 90.70 to 91.25,” he said.

Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, was trading 0.91% lower at 98.48.

Brent crude, the global oil benchmark, was trading at $63.94 per barrel in futures trade.

On the domestic equity market front, Sensex tumbled 1,065.71 points to settle at 82,180.47, while the Nifty dived 353 points to 25,232.50.

Foreign institutional investors offloaded equities worth ₹3,262.82 crore on Monday (January 19, 2026), according to exchange data.