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Rupee edges higher versus dollar but oil risks limit gains

USD/INR trades near 96.30, after the RBI intervened almost daily, while concerns about Red Sea supply disruption and rising oil prices keep upside capped.

Reported · Written up by our desk · Major Pairs

The Indian rupee is trading marginally firmer versus the US dollar ahead of the weekend, with USD/INR dipping to around 96.30 after support from Reserve Bank of India intervention, according to FXStreet.

FXStreet cited a Reuters report saying the RBI has been intervening almost daily in both spot and non-deliverable forward markets to limit rupee weakness, though the scale has been relatively measured. The outlet added that the rupee’s rebound after underperforming for the week could be temporary given fears that oil supply disruptions could worsen.

Oil is providing an offset to currency support, with FXStreet noting the MCX Crude Oil contract expiring July 20 up 1.16% to near Rs. 7,700 and close to a monthly high of Rs. 7,832. The story linked the risk to escalating tensions in the Red Sea, after Iran asked Yemen’s Houthi militia to stand ready to close the route if the US strikes Iranian power infrastructure.

FXStreet also pointed to safe-haven demand for the dollar as US Iran aggression intensifies, lifting the US Dollar Index to about 100.80, up 0.1% at the time of writing. Still, the outlet said expectations for a Federal Reserve hike have cooled after the June CPI report, with CME FedWatch showing odds of a rate hike later this month at 10.2%, down from 24.6% a week ago.

Latest closeWTI crude $79.00 ▼0.8%|Dollar index 100.71 ▲0.2%

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