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Rupee weakens as oil prices surge, USD/INR nears 95.45

USD/INR moved slightly higher near 95.45 as August 19 MCX crude rose about 1%, while traders eyed July CPI for signals on the Fed and India’s inflation path.

Reported · Written up by our desk · Major Pairs

The Indian rupee extended its fall against the US dollar on Wednesday, with USD/INR trading slightly higher near 95.45, according to FXStreet.

The move reflected pressure on an oil-importing economy as surging crude lifted costs, FXStreet noted. MCX Crude for the contract expiring August 19 was up about 1% to roughly Rs. 8,040.

FXStreet linked the oil strength to disruptions risk in the Strait of Hormuz, described as a key chokepoint for nearly one-fifth of global energy supply. Kpler data cited by FXStreet showed shipping traffic through the strait at just six vessels on August 10, versus an average of about 11 over the previous 10 days, and far below pre-war levels of 130 to 140 ships daily.

Traders said the next USD/INR drivers would be July CPI releases for both India and the US, FXStreet reported. India’s retail inflation data is scheduled for 04:00 PM, while the US CPI is expected to influence expectations for the Federal Reserve after remarks at the July policy meeting highlighted ongoing concerns about inflation staying above the 2% target.

Latest closeWTI crude $83.42 ▲1.6%

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