Home›Forex›Major Pairs›Indian rupee weakens near 95.40 per dollar as oil fear…

Indian rupee weakens near 95.40 per dollar as oil fears rise

USD/INR climbed toward 95.40 in early trade, with oil prices gaining on concerns about supply disruption and markets turning their focus to July CPI data for direction.

Reported · Written up by our desk · Major Pairs

The Indian rupee opened lower against the US dollar on Tuesday, with USD/INR rising to around 95.40 as surging oil prices weighed on the currency. FXStreet said the move reflects growing fears of a prolonged global supply disruption.

In early trading, the MCX Crude Oil contract expiring August 19 was up about 0.45% to near Rs. 7,835, closer to its weekly high. The broader backdrop for the currency move includes heightened uncertainty around the Strait of Hormuz, a key passage for a large share of global energy supply.

FXStreet also tied the oil-driven pressure to renewed compensation demands between the US and Iran, after Iran set conditions for reopening the strait. Both sides calling for war-related compensation has increased near-term uncertainty and helped lift oil, which can hurt oil-import dependent economies like India.

This week, FXStreet highlighted July CPI data as a key driver for USD/INR, with the US expecting headline and core CPI to cool to 3.4% and 2.5% year on year. Signs of easing inflation could reduce fears of further Federal Reserve rate hikes after recent labor market data led markets to dial back hawkish expectations.

Latest closeWTI crude $82.30 ▲5.3%

More like this

Sources