The Indian rupee opened marginally weaker against the US dollar amid a stronger greenback, rising oil prices, and ongoing Middle East tensions, with traders monitoring inflation data and global energy developments.
The Indian rupee opened slightly weaker against the US dollar on Thursday, with traders weighing a firmer greenback, renewed tension in the Middle East and the latest domestic inflation data. The dollar index was holding near the 100 level, supported by its safe-haven appeal as markets continued to track geopolitical risks and the possibility of longer-lasting disruption to energy supplies.
The move in the currency market came after a modest correction in the previous session, but investors remained cautious about the durability of the dollar’s rebound. Reuters reported in March that the dollar index had already pushed above 100 amid similar flight-to-safety flows, underscoring how sensitive the currency remains to conflict risk and shifts in sentiment. TD Securities said the July US consumer price report should ease pressure on the Federal Reserve to tighten policy further in the near term, adding that price increases in services appeared to be normalising and that tariff pass-through remained contained. The bank also said it expected policymakers to keep rates unchanged this year.
Oil prices also remained an important backdrop for the rupee. The lack of progress in talks involving the United States and Iran over the Strait of Hormuz, through which a large share of the world’s energy passes, helped crude recover after a weak session. For import-dependent economies such as India, higher oil prices can widen the trade bill and weigh on the currency. On Wednesday, however, crude had come under pressure after OPEC trimmed its forecast for global oil demand growth this year to 580,000 barrels per day from 780,000 bpd.
At home, India’s July retail inflation rose to 4.45% year on year from 4.38% in June, broadly matching expectations and staying within the Reserve Bank of India’s 2% to 6% tolerance band. Technical indicators pointed to a hesitant tone in the dollar-rupee pair, with traders watching whether it can hold above near-term support before any attempt to reclaim higher levels.
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