The Indian rupee opened 4 paise weaker at 94.95 against the US dollar on Monday, 4 May, amid a pullback in oil prices after the U.S. said it would begin efforts to free ships stranded in the Strait of Hormuz. Market participants are also closely tracking developments in ongoing U.S.–Iran negotiations.
The currency had settled at 94.91 on Thursday, after touching an all-time low of 95.33. Indian financial markets were closed on Friday, 30 April.
Brent crude for delivery in July fell to about $105.50 per barrel during the Asian trading session after U.S. President Donald Trump announced on Sunday that the U.S. would intervene to assist vessels stranded in the Strait of Hormuz, labelling the action as a humanitarian measure for neutral countries, though he did not elaborate further.
Nevertheless, analysts noted that limited progress on a broader peace agreement might limit the potential decline in oil prices, as negotiations between the U.S. and Iran continue, with both parties evaluating each other’s responses. Brent crude was most recently observed trading close to $108 per barrel.
The rupee has been under sustained pressure in recent sessions, dropping nearly 2% over the last eight days.
Experts suggest that the recent fluctuations in the rupee are influenced by a complex interplay of global and domestic factors rather than a single cause. Although U.S. economic indicators have consistently shown strength—with ongoing growth and historically low unemployment claims—they have not translated into sustained strength in the dollar.
Analysts emphasise that the primary factor is the divergence in global monetary policies, as central banks such as the Bank of England, the European Central Bank, and the Bank of Japan are expected to tighten policy, whereas the Federal Reserve may maintain its current stance.
Simultaneously, potential actions by Japanese officials to bolster the yen have introduced volatility, unintentionally easing some of the strain on emerging-market currencies such as the rupee. On the home front, analysts indicate that markets are keeping a close eye on possible measures from the Reserve Bank of India, which has intervened in the past to limit significant currency depreciation.
Rupee Outlook
According to Amit Pabari, MD, Research Team at CR Forex Advisors, the rupee is currently at a critical level—not just technically, but also psychologically.
He noted that the 95.20–95.30 range is likely to act as a strong near-term resistance zone.
Given the current market setup, Pabari sees a high probability of a rupee pullback towards the 94.20–93.80 levels.
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