The Indian rupee weakened on Wednesday, a day after recording its best session of the year, as crude oil prices stayed elevated despite a ceasefire between Iran and Israel.

The domestic currency closed 12 paise lower at 86.09 against the US dollar, after ending at 85.97 on Tuesday. The previous session saw the steepest one-day gain for the rupee since May 23, with the unit appreciating 78 paise. Still, the rupee remains among the worst-hit Asian currencies this quarter, largely due to persistently high oil prices.

Also read: Oil prices jump 2% to $68.45 on Iran-Israel ceasefire, US rate cut bets

Geopolitical tensions in West Asia eased after US President Donald Trump criticised both Iran and Israel for breaching a recently agreed ceasefire. His remarks came just hours after the fragile truce was formalised, helping contain market fears of further escalation.

Following the ceasefire, crude oil prices dropped nearly 15 per cent over two sessions, offering some relief to oil-importing economies like India. However, prices regained ground during Wednesday’s trade. As of 3:30 PM IST, Brent crude was up 1.19 per cent at $67.94 per barrel, while WTI crude rose 1.20 per cent to $65.14.

Market participants are now focused on upcoming macroeconomic data from the United States, including the PCE Price Index and GDP figures, which are due later this week. 

Meanwhile, investors are also awaiting the latest US government data on domestic crude and fuel stockpiles, which could influence global oil market direction in the short term.