USD/INR surges on rising crude oil prices amid Middle East war
- The Indian Rupee soars to near 86.95 against the US Dollar amid escalating Middle East tensions.
- Bloomberg reported the possibility of the US striking Iran in the coming days.
- The Fed sees fewer interest rate cuts in 2026 and 2027, retaining two rate cuts for the year.
The Indian Rupee (INR) posts a fresh two-month high near 86.95 against the US Dollar (USD) on Thursday. The USD/INR pair strengthens amid widening conflict between Iran and Israel, and the shallow interest rate cut path guided by the Federal Reserve (Fed) on Wednesday after leaving interest rates steady in the current range of 4.25%-4.50% for the fourth time in a row.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, refreshes weekly high near 99.10.
The war between Tel Aviv and Tehran, which has entered its seventh day on Thursday, has escalated further amid the possibility that the United States (USD) could also strike Iran as early as this weekend, Bloomberg reported.
Financial market participants warn that the direct involvement of the US in the Middle East conflict could mark a significant escalation, potentially leading to devastating outcomes worldwide.
Earlier this week, the US also mobilized some defence equipment to the Middle East, aiming to protect its military bases located in the region. "We are postured defensively in the region to be strong, in pursuit of a peace deal," Defense Secretary Pete Hegseth said in an interview with Fox News.
Heightened geopolitical tensions increase demand for safe-haven assets, such as the US Dollar.
Daily digest market movers: Indian Rupee tumbles on risk-off mood
- The Indian Rupee seems vulnerable against its major peers on Thursday amid dismal market sentiment and firm Oil prices. Tensions between Israel and Iran have dampened demand for riskier assets and have pushed Oil prices higher.
- Currencies associated with nations having higher dependency on the import of Oil, such as India, become vulnerable to wild swings in Oil price movements.
- Another reason behind weakness in the Indian currency is growing expectations that the Reserve Bank of India (RBI) could reduce interest rates again this year. Market participants have become increasingly confident of further policy-easing after the release of the headline Consumer Price Index (CPI) and Wholesale Price Index (WPI) inflation data for May, which showed that price pressures grew moderately.
- Earlier this week, RBI Governor Sanjay Malhotra also expressed confidence in an interview with Business Standard that, “if the inflation outlook turns out to be below our projections, it will open up policy space”.
- In the US region, the Fed left interest rates unchanged in the range of 4.25%-4.50% for the fourth consecutive time, as expected, and retained their forecast of two interest rate cuts, but revised interest rate guidance higher for 2026 and 2027 amid upside risks to inflation.
- Fed Chair Jerome Powell cheered soft inflation readings seen in the last few months but warned that he is “beginning to see some tariff effects and expects more in coming months”, during the press conference following the interest rate decision on Wednesday.
- Jerome Powell warned of stagflation risks, citing that “near-term inflation expectations have moved up,” and business sentiment has soured due to concerns over tariffs imposed by US President Donald Trump. Powell added that “effects of tariffs will depend on level, and increases this year will likely weigh on economic activity and push up inflation”. Meanwhile, Fed officials have also revised Gross Domestic Product (GDP) growth for the year to 1.4%, down from a prior estimate of 1.7%.
Indian Rupee PRICE Today
The table below shows the percentage change of Indian Rupee (INR) against listed major currencies today. Indian Rupee was the weakest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | INR | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.03% | 0.00% | 0.09% | 0.15% | 0.53% | 0.73% | 0.33% | |
| EUR | -0.03% | -0.01% | 0.03% | 0.07% | 0.44% | 0.66% | 0.42% | |
| GBP | -0.01% | 0.00% | 0.06% | 0.08% | 0.45% | 0.76% | 0.33% | |
| JPY | -0.09% | -0.03% | -0.06% | 0.02% | 0.31% | 0.56% | 0.31% | |
| CAD | -0.15% | -0.07% | -0.08% | -0.02% | 0.29% | 0.60% | 0.30% | |
| AUD | -0.53% | -0.44% | -0.45% | -0.31% | -0.29% | 0.35% | -0.07% | |
| NZD | -0.73% | -0.66% | -0.76% | -0.56% | -0.60% | -0.35% | -0.52% | |
| INR | -0.33% | -0.42% | -0.33% | -0.31% | -0.30% | 0.07% | 0.52% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Indian Rupee from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent INR (base)/USD (quote).
Technical Analysis: USD/INR jumps close to 87.00
The Indian Rupee extends its losing spree against the US Dollar for the third trading day on Thursday. The near-term trend of the USD/INR pair is bullish as the 20-day Exponential Moving Average (EMA) slopes higher around 85.95.
The 14-day Relative Strength Index (RSI) breaks above 60.00, suggesting that a fresh bullish momentum has been triggered.
Looking down, the 20-day EMA is a key support level for the major. On the upside, the April 11 high of 87.14 will be a critical hurdle for the pair.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
