Rupee Rally Fades as Oil Surge Triggers Fresh Weakness by Amit Gupta Kedia Advisory
The Indian Rupee has started the week on a weaker footing, opening at 93.30 against the US dollar, signaling that the recent two-week relief rally is losing momentum. The shift reflects renewed macro pressure following geopolitical developments.
The primary trigger remains the sharp rally in Brent Crude, which surged nearly 7% to $102 per barrel after the collapse of US-Iran negotiations. Rising tensions around the Strait of Hormuz, which carries nearly 20% of global oil flows, are increasing supply risks and directly inflating India’s import bill.
Simultaneously, global financial conditions have turned unfavorable. The US Dollar Index remains firm near 99 levels, supported by rising US yields and safe-haven demand. This has triggered capital outflows from emerging markets, adding further pressure on the rupee.
On the domestic front, the rupee is also losing a key support factor. The recent strength was largely driven by forced unwinding of arbitrage positions after RBI capped banks’ forex exposure. With the deadline now over, this temporary dollar supply has faded, removing a crucial cushion for the currency.
View:
Rupee is facing a double pressure—higher crude and fading inflows.”
Technical View:
USDINR has corrected sharply from the 95.20–95.40 zone and is now showing signs of a short-term pullback after oversold conditions. Momentum indicators suggest stabilization, with RSI near neutral levels and MACD showing early signs of bottoming out.
Short-term recovery toward 94.24 is possible, but broader trend remains weak due to strong dollar, high crude, and geopolitical uncertainty.
Conclusion:
The recent rally appears temporary, while the underlying trend continues to favor rupee depreciation in the near term.
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