Indian rupee hits two-month low, ends nearly flat below 96 per US dollar

The Indian rupee slipped past the 96 per US dollar mark on Tuesday to touch a two-month low, amid pressure from elevated crude oil prices and broader global cues. The currency recovered from its intraday low to end nearly flat.

As per provisional data, the rupee settled at 95.98 per US dollar, down 1 paisa from its previous close.

Dilip Parmar, Research Analyst, HDFC Securities, said, "The Indian Rupee started the day under pressure, cracking below 96 level before clawing back some lost ground. Swift RBI action, a pullback in global crude, and equity index rebalancing-driven foreign inflows stepped in to restore stability. Looking ahead, the pair's direction will remain heavily influenced by what happens with oil and broader global risk dynamics."

On the technical front, Parmar said spot USD-INR faces resistance at 96.30, while 95.80 acts as support.

Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, said, "Rupee traded largely flat, as crude prices saw some profit booking from recent highs. With the rupee appearing oversold near the 96.00 level, any major positive domestic or global cues could support a recovery. The rupee range can be seen between 95.65–96.15."

The rupee's move comes as crude oil prices remain elevated, a key factor for India's external balance given the country's dependence on imported crude oil. High global bond yields and the US dollar's strength have also remained important factors for currency markets, according to Trivedi.

"The rupee weakened to a two-month low as higher crude oil prices and renewed geopolitical concerns weighed on sentiment. Despite the recent depreciation, the broader trend does not yet suggest a one-way move, with both supportive and negative factors continuing to influence the currency," CR Forex Advisors MD - Amit Pabari said.

"Oil market volatility has resurfaced after US President Donald Trump rejected Iran's proposal to reopen the Strait of Hormuz over the weekend. As a result, Brent crude has remained above the $100 per barrel mark, reviving concerns over India's import bill and increasing dollar demand from oil companies. This rise in dollar demand has been one of the key reasons behind the recent weakness in the rupee and could continue to limit gains if oil prices remain elevated," he added.

"The rupee is likely to remain range-bound in the near term as these opposing factors continue to offset each other. Markets will closely monitor crude oil prices, developments around the Strait of Hormuz and signals from the upcoming RBI policy meeting for the next directional trigger," Pabari further stated.

At last check, Brent crude futures were down 0.94 per cent at $104.29 a barrel, after rising above the $108-a-barrel mark on Monday.