Rupee Soars on Crude Decline, MUFG Sees Further Gains

The Indian rupee strengthened to its strongest reading in three weeks against the US dollar on Wednesday, reaching 95.40 as Brent crude prices fell 2.6% following a deal brokered by Oman to ensure safe passage through the Strait of Hormuz.

The agreement, which includes a goodwill gesture from Iran ahead of renewed nuclear talks, has driven a four-session winning streak for the rupee, with the currency clearing the key resistance level of 95.50 and setting it up as support.

MUFG, a Japanese lender, raised its year-end target for the rupee to 94, implying a further 1.5% appreciation from Wednesday's close, but warned that a hawkish statement from Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium could reverse the gains.