Indian Rupee opens lower as renewed US-Iran tensions lift oil prices
The Indian Rupee (INR) opens slightly lower against the US Dollar (USD) at the start of the week. The USD/INR pair ticks up to near 95.43, as higher oil prices due to renewed tensions between the United States (US) and Iran have weighed on the Indian currency.
The Indian Rupee (INR) began the week trading slightly lower against the US Dollar (USD) at 95.43, due to rising oil prices caused by renewed tensions between the United States (US) and Iran. MCX Crude Oil futures for September 21 rose by 2.13% to around Rs. 8,160. Tensions between the US and Iran have rekindled fears of military conflict in the Middle East, which could potentially disrupt global oil supplies.
The US launched strikes against Iranian rocket launchers in response to Iranian missile attacks on US bases in Jordan. Fed Chairman Kevin Warsh emphasized the Federal Reserve's focus on bringing inflation down to 2% during a speech at the Jackson Hole Symposium. The odds of a rate hike in the September meeting have decreased to 39.4% from 60% a week earlier.
Investors will be watching the upcoming US Nonfarm Payrolls (NFP) data for August to gauge the Fed's interest rate outlook. Technical analysts note that USD/INR is trading near a key support level at 95.53 and may test the 96.00 level. The Rupee is heavily influenced by external factors, such as oil prices, the US Dollar, and foreign investment.
The Reserve Bank of India (RBI) intervenes in foreign exchange markets to maintain a stable exchange rate and aims to keep inflation at its 4% target by adjusting interest rates.
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