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Rupee slips as oil rebounds and USD/INR rises near 95.85

USD/INR is near 95.85 after a three-day rupee winning streak, with the rebound tied to renewed Middle East tensions and a potential risk to energy flows through the Strait of Hormuz.

Reported · Written up by our desk · Major Pairs

The Indian rupee opened marginally weaker against the US dollar on Wednesday after a three-day winning streak, with USD/INR rebounding to around 95.85, according to FXStreet.

The move tracked a strong rebound in oil prices, with the MCX Crude Oil contract expiring August 19 up 4.3% at about Rs. 7,930 after snapping a three-day losing streak. FXStreet said higher oil prices can weigh on the rupee because India imports 85% of its energy needs, increasing foreign outflows from reserves.

FXStreet also linked the oil jump to renewed geopolitical risks in the Middle East, including reported precision strikes by the US Central Command and Saudi Arabia targeting Iran-backed groups, and developments that have raised fears around shipping and supply through the Strait of Hormuz. The outlet noted that transport remains constrained in the region, which can keep global oil supply tight.

Ahead of the Federal Reserve’s monetary policy decision at 18:00 GMT, FXStreet cited CME FedWatch showing a 69.5% chance the Fed holds interest rates unchanged in the 3.50% to 3.75% range, while the US Dollar Index traded 0.13% lower near 101.25.

Latest closeWTI crude $81.23 ▼1.7%|Dollar index 101.39 ▼0.1%

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