Indian Rupee falls to two-week low as higher oil prices continue to weigh

The Indian Rupee (INR) hit a two-week low against the US Dollar (USD) on Thursday as soaring oil prices continued to impact the South Asian currency. In the early session, the USD/INR pair rose slightly to around 95.30. Currently, the MCX Crude Oil contract due to expire on November 19 is down 1.5% to approximately Rs. 9,650. However, the oil price is near its recent high of Rs.

9,828. Currencies from nations like India, which heavily import oil, often underperform in high-oil-price scenarios. Oil prices have remained high due to heightened concerns about further supply disruptions, as reports indicate Israel and the United States (US) are planning additional strikes on Iran following their respective elections.

Deutsche Bank analysts note that oil prices remain elevated after the Wall Street Journal reported that President Donald Trump's administration warned Gulf states to prepare for a potential fresh operation against Iran post midterms. Additionally, Israeli Prime Minister Benjamin Netanyahu suggested renewed cooperation with President Trump against Iran in his post-election remarks.

Tensions between Iran-aligned Houthis and Saudi Arabia also heighten energy supply worries. On Tuesday, a Houthi military spokesman claimed the group launched a ballistic missile towards the Ras Tanura oil refinery in eastern Saudi Arabia, the kingdom's largest refinery. The brief US Dollar rally after the Federal Reserve's (Fed) monetary policy announcement also supports the USD/INR pair.

As of now, the US Dollar Index (DXY) is marginally higher near 102.20. The Fed kept interest rates steady at 3.75%-4.00% after their meeting, citing the need to achieve price stability. Fed Chair Kevin Warsh emphasized only six policy decisions would be made starting in 2028. The USD/INR pair is near 95.2875, slightly bearish as it remains below the 20-day Exponential Moving Average (EMA) at 95.3303.

The RSI is around 47, indicating neutral-to-soft momentum rather than an oversold condition, which weakens the potential for a strong rebound. The nearest resistance for a rebound is at the 20-day EMA at 95.3303. Without strong structural support, traders should watch the recent low just under 95.10 for potential demand reemergence if selling continues.