USD vs INR: Rupee Slides Against Dollar as Oil Surges on Iran Conflict

Mumbai, April 28:The rupee fell 33 paise at 94.52 versus the dollar as oil continued to boil with prices remaining elevated as tensions in the Middle East kept fuel supplies on a tight leash.

The currency fell as low as 94.54 and started off on a weak note opening 18 paise lower versus the dollar at 94.37.

Oil Surge Weighs on Rupee

High crude oil prices continued to depress the rupee with the key commodity rallying in recent sessions as tensions in the Middle East worsen the energy security situation across the globe.

Concerns over supply disruptions have kept oil prices elevated, posing a challenge for oil-importing countries like India by widening the trade deficit and fuelling inflationary pressures.

Market participants said the spike in oil prices has increased dollar demand from importers, particularly oil marketing companies, thereby putting downward pressure on the rupee.

Weak Asian Cues Add to Pressure

The rupee also tracked weakness in broader Asian currencies, which were under pressure amid a cautious global environment. A stronger dollar and rising U.S. yields have further dampened risk appetite, prompting outflows from emerging markets and adding to the currency’s decline.

Traders noted that the rupee movement remained largely in sync with regional peers, as investors stayed wary of global macro uncertainties and geopolitical risks.

Limited Support from Domestic Factors

Domestic stocks offered limited support to the rupee as the Sensex fell 160 points and shares of banks weighed on sentiment. External factors worsened sentiment as elevated oil prices and cautious global cues combined to further depress the rupee.

Outlook

Analysts expect the rupee to remain under pressure in the near term, with oil prices and geopolitical developments continuing to dictate direction. Any sustained rise in crude could keep the currency on the back foot, while volatility in global markets may further limit upside.

In the near term, the rupee is likely to trade with a weak bias, with traders closely monitoring oil price movements, capital flows and broader risk sentiment for further cues.

Source:

• spot rates from https://www.moneycontrol.com/markets/currencies/