Mumbai, Jun 15 (PTI) The rupee strengthened 60 paise to settle at 94.58 against the US dollar on Monday as global crude oil prices dropped sharply after US President Donald Trump announced that the US and Iran finalised a deal to end the war.

A surge in the domestic equity markets and a weaker US dollar further drove the local unit, forex traders said.

At the interbank foreign exchange, the rupee opened at 94.70 against the US dollar and traded in the range of 94.45-94.77. Eventually, it settled at 94.58, up 60 paise from its previous close.

The rupee jumped 67 paise to close at 95.18 against the greenback on Friday.

The US and Iran finalised a deal to end their 107-day war and open the Strait of Hormuz, the narrow waterway used to ferry one-fifth of the global oil supplies. The deal is expected to be signed on Friday in Switzerland.

President Trump made the announcement on Truth Social on Sunday evening, easing pressure on the global energy markets, as officials said the peace agreement would be signed on June 19 in Switzerland.

"The deal with the Islamic Republic of Iran is now complete. Congratulations to all," Trump said, adding that it would reopen the Strait of Hormuz and end the US naval blockade on Iranian ports.

"The Indian rupee rose for the second consecutive day on a rise in risk appetite in global markets amid the US-Iran deal. This led to a sharp rally in global risk assets and a fall in global crude oil prices. A decline in the US dollar and US treasury yields, too, favoured the rupee," Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan, said.

"Falling crude oil price has also eased concerns over inflation. We expect the rupee to trade with a positive bias as the US-Iran deal has improved global risk sentiments," he said, adding that the USD-INR is expected to trade in a range of Rs 94.20 to Rs 94.95 on Tuesday.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 99.65, down 0.20 per cent.

Brent crude, the global oil benchmark, was trading lower by 4.97 per cent at USD 82.99 per barrel in futures trade.

"The crash in Brent crude below the USD 83-level will significantly reduce India's current account deficit for FY27. This is the principal reason behind the rupee's strength. Also, FII selling is expected to taper off soon since further FII selling while the rupee is strengthening will be a losing proposition. Capital mobilisation by banks through the FCNR B deposits is another positive factor," V K Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said.

On the domestic equity market front, Sensex surged 1,126.72 points, or 1.49 per cent, to close at 76,654.67. The Nifty rose sharply by 231.00 points, or 0.98 per cent, to settle at 23,853.90.

Meanwhile, India's wholesale price inflation shot up to 9.68 per cent in May, from 8.26 per cent in April, led by a sharp spike in prices of fuel and power, manufactured and food items.

The country's merchandise exports rose 18 per cent to USD 45.2 billion, according to the commerce ministry data released on Monday. Imports, too, went up 20.62 per cent to USD 73.41 billion in May, leaving a trade deficit of USD 28.21 billion.

Foreign institutional investors turned buyers, purchasing equities worth Rs 200.05 crore on a net basis on Monday, according to exchange data.

India's forex reserves dropped USD 711 million to USD 681.610 billion during the week ended June 5 due to a sharp decline in foreign currency reserves, the RBI said on Friday. PTI TRB HVA