The Indian rupee (INR) maintains its 10-day loss against the US dollar (USD) in Tuesday’s opening session. USD/INR is trading steady around 96.35, close to the all-time high of 96.62 posted on Monday, as elevated crude oil prices due to tight energy flows through the Strait of Hormuz continue to weigh on the Indian currency.
At press time, WTI crude was slightly higher at around $102.16, but was close to the more than two-week high of $104.74 posted on Monday.
Currencies from economies such as India that rely heavily on oil imports to meet their energy needs tend to underperform in a high oil price environment.
In response to pressure from higher crude oil prices, the Indian government announced an augment in petrol and diesel prices by 87 and 91 paise per liter, the second augment in less than a week. On Friday, gasoline and diesel prices increased by PLN 5,500. 3/liter.
Trump postpones planned attacks on Iran
The rise in oil prices appears to have been put on hold for a while as US President Donald Trump’s latest comments signaled that a deal with Iran could soon be confirmed.
Late Monday, US President Trump said he was delaying planned attacks on Iran due to the “very positive development” in the talks and that there was a “very good chance” an agreement could be reached, The Guardian reported. Trump also said in an interview with Fortune on Monday: “I can tell you one thing – they [Iran]I can’t wait to sign it [a deal]” On the same day, a spokesman for Iran’s Ministry of Foreign Affairs said, “Iran is focused on ending the war at this stage,” while confirming that negotiations through Pakistan were still ongoing.
FIIs continue to increase their stake in the Indian stock market
Foreign institutional investors (FIIs) remained net buyers of the Indian stock exchange in the last three trading days despite concerns over India Inc.’s earnings outlook. in the face of constantly elevated oil prices. On Monday, foreign investors infused investments worth Rs. 2,813.69 crore to the Indian stock exchange.
In the last three trading days, FIIs have increased their stakes by a total of Rs. 4,330.32 crores.
A higher US dollar also strengthens USD/INR
A higher US dollar due to high US Treasury yields, with investors pricing in the possibility of Federal Reserve (Fed) rate cuts this year, is also strengthening the USD/INR pair.
At press time, the US Dollar Index (DXY), which measures the value of the US dollar against six major currencies, is 0.15% higher to close to 99.10. The yield on the 10-year U.S. Treasury note fell slightly to almost 4.60%, still close to the one-year high of 4.63% posted on Monday.
CME’s FedWatch tool shows that the Fed is 53% likely to keep interest rates at current levels through the end of the year, while the rest support at least one rate hike this year.
Technical Analysis: USD/INR remains stable above 96.00
At the time of writing, the USD/INR rate remains around 96.35. The pair is extending its rally well above the 20-day exponential moving average (EMA) at 95.07, maintaining a clear bullish bias in the near term.
The rising 20-day EMA below the price indicates that the underlying trend remains constructive, while the relative strength index (RSI) at 70.13 is entering overbought territory, suggesting that the upside momentum is sturdy but increasingly stretched.
The downside is that immediate support is at the 20-day EMA around 95.07, where buyers will likely defend the prevailing uptrend during shallow pullbacks. A deeper correction below this energetic low would expose the recent breakout area closer to the mid-94s, although while price remains above the 20-day EMA, declines will likely be seen as corrections in the broader bull structure. Looking up, the pair is essentially in uncharted territory and is more likely to attempt to extend the rally towards 97.00.
(The technical analysis for this story was written with the assist of an AI tool.)
