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Rupee holds gains as USD/INR slips near 95.65 on softer oil

USD/INR is trading around 95.65 after crude futures fell, with India importing 85% of its energy demand.

Reported · Written up by our desk · Major Pairs

The Indian rupee extended its winning run versus the US dollar for a third straight day, pushing USD/INR lower to around 95.65, according to FXStreet. The move came as crude oil prices declined further, supporting the Indian currency.

FXStreet notes that India relies on imports for about 85% of its energy needs, so a steep drop in oil can reduce foreign currency outflows and improve the rupee’s appeal. In early trading, the MCX Crude Oil contract expiring August 19 was down about 1.4% to around Rs. 7,848, the lowest level seen in a week.

The softer oil backdrop is linked to a pause in the US-Iran exchange of attacks after a Trump statement that Iran was discussing a deal with Washington, alongside a temporary halt in strikes to allow diplomacy. FXStreet cautioned, however, that the Strait of Hormuz remained closed, meaning supply conditions have not fully normalized.

Looking ahead, FXStreet flags the Federal Reserve’s policy announcement on Wednesday as a key catalyst for markets, with CME FedWatch showing traders see a 62% chance the Fed leaves rates unchanged at 3.50% to 3.75%. The outlet also points to the Reserve Bank of India’s monetary policy decision next week as the next major driver for USD/INR, which is holding a corrective phase just below its 20-day exponential moving average near 95.9.

Latest closeWTI crude $81.92 ▼8.3%

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