Indian Rupee fails to capitalize on US-Iran ceasefire extension

The Indian Rupee (INR) weakens further against the US Dollar (USD) on Wednesday, extending its losing streak for the third trading day. The USD/INR pair jumps to near 93.85 as the Indian currency underperforms, with oil prices holding the majority of Tuesday’s gains, despite the extension of a ceasefire between the United States (US) and Iran for an indefinite period.

As of writing, the WTI Oil price is down 1% to near $88.70 after surging almost 5% on Tuesday.

Currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs, tend to underperform in a high oil price environment.

On Tuesday, the Indian currency faced sharp selling pressure after the Reserve Bank of India (RBI) withdrew some measures, such as restrictions on offering non-deliverable forwards (NDFs) to resident and non‑resident users, which were meant to support the domestic currency against one-sided depreciation moves.

Trump announces ceasefire extension with Iran

Late Tuesday, US President Donald Trump announced, through a post on Truth Social, that he has extended the two-week ceasefire, which was set to expire on April 22, upon the request of Pakistan, until Washington receives a unified proposal from Tehran. However, Trump clarified that the US blockade of Iranian sea ports will remain intact, a move that is restricting the usual business of Iran and crippling its economy.

Meanwhile, the stance from Iran seems clear that they won’t return to the table with the US for another round of peace talks unless Washington removes the blockade.

The announcement of a ceasefire extension resulted in a broad risk rally; however, oil prices remain significantly higher, as the Strait of Hormuz remains closed.

FIIs turn out net sellers again

Overseas investors remain net sellers in the Indian stock market for the second trading day on Tuesday. In the first two trading days of the week, Foreign Institutional Investors (FIIs) have offloaded their stake worth Rs. 2,978.92 crore. The selling amount is higher than the three-day buying of Rs. 1,731.71 crore in the April 15-17 period, which suggests that the interest of foreign investors toward the Indian stock market remains lackluster despite the US-Iran war appears to be shifted to a prolonged standoff.

Kevin Warsh expresses preference for a smaller balance sheet

On Tuesday, US President Trump nominated Kevin Warsh as the successor of the Federal Reserve (Fed) Chairman Jerome Powell highlighted the need for fundamental policy reforms in his testimony before the Senate Banking Committee. Warsh also expressed a preference for a “smaller balance sheet”, which would mean rates could go lower, inflation get better, economy become stronger.

Technical Analysis: USD/INR holds firmly above 20-day EMA

USD/INR trades higher at around 93.85 on Wednesday. The price holds a constructive bullish bias as it remains above the 20-day exponential moving average (EMA) at 93.18. The short-term uptrend from last week’s lows is supported by this dynamic floor, while the Relative Strength Index (14) around 56 suggests moderate positive momentum without overbought conditions, hinting that buyers still retain control in the near term.

On the downside, immediate support is seen at the 20-day EMA near 93.18, where a break would threaten the current upswing and open the door to a deeper correction toward the January 28 high at 92.28. Looking up, the price could reclaim the all-time highs above 95.00 if it manages a decisive break above the 94.00 level.

(The technical analysis of this story was written with the help of an AI tool.)