The rupee slipped 8 paise to 95.78 against U.S. dollar in early trade on Wednesday (May 27, 2026) on elevated crude oil prices as fresh U.S. strikes dampened optimism for an imminent U.S.-Iran peace deal.

Forex traders said escalating U.S.-Iran conflict is again boosting safe-haven demand for the dollar. Moreover, Brent oil remained well bid at $98 levels as risk aversion, geopolitical risk and war clouds in West Asia kept it higher.

At the interbank foreign exchange market, the rupee opened on a positive note at 95.60, but soon pared the gains and fell to 95.78 against the American currency, registering a fall of 8 paise from its previous close. On Tuesday (May 26, 2026), the rupee depreciated 44 paise to close at 95.70 against the U.S. dollar.

"The rupee slipped after crude oil prices rebounded as hopes of an immediate U.S.–Iran peace deal faded slightly. Reports of renewed U.S. strikes on Iran and delays in negotiations kept markets cautious, even though investors still believe a broader resolution remains possible," CR Forex Advisors Managing Director (MD) Amit Pabari said.

Now, attention shifts toward the upcoming RBI Monetary Policy Committee (MPC) meeting scheduled for June 3-5. "Markets remain divided between a possible rate hike and a status quo decision. The larger question, however, is whether RBI may choose to prioritise currency stability alongside inflation management,” he said.

"With the Central bank already using several measures to manage rupee volatility, interest rates could also become part of the broader strategy to attract inflows back into the system," Mr. Pabari added. The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 99.09, down 0.07%.

Brent crude, the global oil benchmark, was trading down 1.50% at $98.09 per barrel in futures trade after reports that the U.S. had carried out fresh attacks against Iran, offsetting hopes of a deal to reopen the Strait of Hormuz.

On the domestic equity market front, Sensex climbed 127.83 points to 76,137.53 in early trade, while the Nifty was up 36.45 points to 23,950.15. Foreign institutional investors offloaded equities worth ₹2,407.87 crore on Tuesday (May 27, 2026), according to exchange data.