The rupee rebounded sharply on Tuesday to post its steepest single-day gain in nearly five years, climbing 73 paise to settle at 86.05 against the US dollar, tracking a slump in global crude oil prices and easing geopolitical tensions in West Asia.According to forex traders, a weak dollar and firm domestic equities also supported the local currency. The 73 paise gain matched the rupee’s previous record jump on September 1, 2020.At the interbank foreign exchange, the domestic unit opened at 86.07 and moved between 85.91 and 86.27 before closing at 86.05 against the greenback. The rupee had ended at a five-month low of 86.78 on Monday after falling 23 paise.Brent crude futures fell 3.19% to $69.20 per barrel following US President Donald Trump’s announcement of a ceasefire agreement between Iran and Israel. The easing of geopolitical tensions lowered the safe-haven demand for the dollar and lifted global risk appetite, reported PTI.“The rupee gained on improved global risk sentiments following reports of a ceasefire between Israel and Iran. A sharp decline in crude prices and positive domestic equities further supported the rupee,” Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan told news agency PTI. He added that the dollar index also softened on the ceasefire news.Choudhary said traders will now focus on US consumer confidence data and Federal Reserve Chair Jerome Powell’s congressional testimony. “USD-INR spot price is expected to trade in a range of Rs 85.60–86.40,” he added.S&P Global Ratings on Tuesday revised India’s GDP growth forecast to 6.5% for FY26, citing lower oil prices, easing monetary policy and a normal monsoon. The rating agency said geopolitical risks were unlikely to put “significant pressure” on the rupee or inflation. S&P expects the rupee to weaken moderately to 87.5 per dollar by end-2025, from 86.6 at end-2024.Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, said the rupee was stabilised by the crude price fall. “Market participants will closely watch the Fed Chair’s testimony for further cues. We expect the rupee to trade in a band of 85.75 to 86.25,” he told PTI.Meanwhile, the dollar index was down 0.48% at 97.94.On the domestic equities front, the Sensex gained 158.32 points to close at 82,055.11, and the Nifty rose 72.45 points to 25,044.35.Foreign institutional investors (FIIs) offloaded shares worth Rs 5,266.01 crore on Tuesday, according to exchange data.