Indian rupee gains 0.8% to 94.56 per dollar, but recovery faces a fresh test

The Indian rupee strengthened 0.8% this week to 94.56 per dollar, rebounding sharply from its record low of 96.96 on May 20. Improved risk sentiment followed a US-Iran agreement that raised hopes of fuller passage through the Strait of Hormuz, helping Brent crude futures fall 7% over the week to about $80 a barrel. With India a major oil importer, softer crude prices reduce pressure on the trade deficit and inflation, supporting the currency. Foreign portfolio flows also steadied, with net inflows of $421 million over the week, according to NSDL data.