Rupee opens 41 paise higher at 96.15 against US dollar amid easing crude oil prices

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The Indian rupee opened 41 paise higher at 96.15 against the US dollar on Monday, 27 July, supported by a sharp decline in crude oil prices after US President Donald Trump paused military strikes on Iran following nearly two weeks of hostilities.
According to a Reuters report, the domestic currency also received support from expected foreign capital inflows, driven by a series of recent measures announced by the Reserve Bank of India (RBI) to attract overseas investments.
Brent crude for September delivery fell nearly 4% to $93.02 per barrel after the US and Iran halted further strikes, raising hopes of a diplomatic breakthrough that could ease geopolitical tensions and restore normal shipping through the Strait of Hormuz.
Oil prices surged in recent weeks amid fears of supply disruptions from escalating military action between the US and Iran, with Brent crude briefly crossing $102 per barrel last week.
The sharp correction in crude prices is expected to provide significant relief to the rupee, given India's dependence on imported crude oil. Lower oil prices help reduce the country's import bill and ease pressure on the trade deficit and inflation.
On Friday, the rupee came close to breaching the 97-per-dollar mark, which would have set a record low. Intervention by the Reserve Bank of India, coupled with the subsequent decline in oil prices, has helped the domestic currency recover from those levels.
According to experts, despite the recent pause in hostilities between the US and Iran, geopolitical risks remain elevated. Reports that Iran has accused Ukraine of attacking an Iranian vessel in the Caspian Sea, while Ukraine has alleged that Iran is using Russian satellite imagery to coordinate strikes in the Middle East, suggest that global conflicts are becoming increasingly interconnected. Experts believe that as intelligence, military technology and strategic alliances overlap across regions, the possibility of a prolonged period of geopolitical uncertainty remains high, limiting the scope for a sustained decline in oil prices.
Experts noted that the US dollar remained firm after stronger-than-expected services activity offset softer manufacturing data. More importantly, input costs rose to a 14-month high, while selling prices reached their highest level since August 2022, reinforcing concerns that inflationary pressures remain persistent. With markets awaiting the US Federal Reserve's policy meeting this week, expectations of a cautious monetary policy stance have kept the Dollar Index supported around 101.3, which could continue to weigh on emerging market currencies, including the rupee.
According to market experts, history also points to a challenging period for the Indian currency. Over the past 18 years, the rupee has weakened in August in 13 years, making it one of the seasonally weakest months for the currency. Experts added that when geopolitical or macroeconomic shocks coincide with this seasonal trend, the depreciation has typically been more pronounced. While easing crude oil prices have provided near-term relief, persistent geopolitical tensions and a firm US dollar suggest the rupee could remain under pressure in the weeks ahead.
According to Amit Pabari, MD, Research Team, CR Forex Advisors, since the 94.30 days have been simple, the rupee has weakened all the way to 96.50. That view stays the same. A hawkish Fed, a still tense geopolitical mood and typical August seasonality all point towards 97.00 to 97.50 in the near term. Only genuine peace talk headlines can pull off a rescue, worth around 30 to 50 paisa of relief. The support for now sits at 95.90 to 96.00.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Dhanya Nagasundaram works as a Content Producer at LiveMint, specializing in news related to financial markets, stocks, and business. With over eight years of experience in journalism and content creation, she has honed her skills in data-driven reporting and market analysis. Her focus is on monitoring stock trends, initial public offerings (IPOs), corporate news, policy shifts, and larger economic trends that affect investors and market players. <br><br> At LiveMint, Dhanya consistently writes and produces articles that make complex financial topics accessible to readers. She keeps a close eye on equity markets, commodities, and macroeconomic indicators, assisting audiences in comprehending how global and domestic events influence investment perspectives. Her stories frequently underscore emerging trends within sectors, the IPO market, company earnings results, and market strategies pertinent to both retail and institutional investors. <br><br> Before her tenure at LiveMint, Dhanya accumulated a wealth of professional experience at various companies, including MintGenie, Informist, Cogenics, Chary Publications, KPMG, and the Royal Bank of Scotland. These positions allowed her to establish a solid foundation in financial research, reporting, and content creation. <br><br> Throughout her career, she has explored numerous subjects such as trading strategies, commodities, IPOs, wealth generation, corporate profits, and macroeconomic indicators. Her background in both financial journalism and corporate settings has given her the ability to tackle stories with analytical rigor while ensuring clarity for her audience. Through her contributions, Dhanya strives to deliver insightful, trustworthy, and investor-centric financial content.
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