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Rupee weakens as USD/INR nears 95.4 on rising oil prices

USD/INR is supported near 95.4 as oil climbs and markets await India and US CPI data this week that could shift Fed rate expectations.

Reported · Written up by our desk · Major Pairs

The Indian rupee opened weaker versus the US dollar on Tuesday, with USD/INR rising to around 95.4, according to FXStreet. The move was tied to surging crude prices amid growing fears of a prolonged global supply disruption, which tends to pressure oil-importing currencies like the rupee.

FXStreet also linked the FX picture to higher oil prices driven by uncertainty over reopening the Strait of Hormuz. The outlet noted that the dispute includes demands for compensation for war-related damages, which has boosted near-term energy price risk.

This week, FXStreet said the next key catalyst for USD/INR will be consumer price index releases, with India’s July CPI due on Wednesday. On the US side, the outlet cited expectations for cooling inflation, with headline CPI seen at 3.4% year on year and core CPI at 2.5% year on year, which could ease fears of further Fed rate hikes.

FXStreet added that it has recently seen markets roll back more hawkish Fed expectations after July US nonfarm payrolls showed a smaller labor force change than estimated. It also referenced Fitch’s view of a stable outlook for India, even with headwinds from energy shocks and residual risks from US-Iran tensions.

Latest closeWTI crude $82.30 ▲5.3%

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