The Indian rupee is expected to open lower on Tuesday, pressured by a rebound in global oil prices and heightened geopolitical tensions in the Middle East following comments from former US President Donald Trump, according to a Reuters report.
Non-deliverable forwards (NDFs) suggest the rupee opening in the 86.12–86.16 range against the US dollar, slightly in comparison to 86.06 during the prior session. On Monday, the Indian currency fluctuated within the 85.94–86.23 band, with support holding steady near the 86.20 level, as it did on Friday.
The 86.20–86.25 range is “proving difficult” to take out for dollar bills, and the probability of it being breached on Tuesday is low, according to a currency trader from a Mumbai-based bank. The market’s caution is being driven by a sharp rise in Brent crude, which rose more than 1.5% on Tuesday, and renewed tension in the Middle East. US equity futures dipped following reports that Trump urged the evacuation of Tehran and convened his national security team, cutting short his attendance at the G7 summit in Canada.
“How the US may get involved and how Iran may respond moving forward will certainly be crucial for the path of markets,” MUFG Bank stated in a report.
As one of the world’s largest crude importers, India remains highly sensitive to oil price volatility, with sustained gains in Brent potentially widening the trade deficit and increasing pressure on the rupee.
