The Indian Rupee (INR) ticks higher against the US Dollar (USD) in the opening session on Wednesday. The USD/INR pair edges down to near 95.00 despite renewed geopolitical risks, following United States (US) attacks on Iran, which have lifted oil prices.
In the opening session, the MCX Crude Oil contract expiring on July 20 is up 2.62% to near 6,882. The contract also gained almost 2.35% on Tuesday.
Currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs, tend to underperform when oil prices surge.
US strikes in retaliation for attacks on commercial ships
The US Central Command has reported, through a post on X, that it launched powerful attacks on Iranian military infrastructure for attacking commercial ships transiting through the Strait of Hormuz, a critical chokepoint for almost 20% of global energy supply. In response, Tehran clarified that it attacked those ships for crossing the chokepoint without its approval. However, the US, Qatar, and Saudi Arabia have blamed Iran for the attacks on the vessels.
Meanwhile, Iran's top negotiator Mohammad Bagher Ghalibaf has accused the US of violating the Memorandum of Understanding (MoU) signed to end the war, and warned that Tehran won’t step back. “The era of bullying and extortion is over. It leads nowhere. We don’t fold,” Ghalibaf wrote on X.
US Dollar ticks down ahead of FOMC Minutes
In the late Asian trade, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades subduedly near 101.10. The US Dollar is expected to trade broadly sideways ahead of the Federal Open Market Committee (FOMC) minutes of the June policy meeting, which will be published at 18:00 GMT.
Investors will gauge what possible reasons were behind policymakers’ decision to avoid delivering remarks on the monetary policy outlook. In the policy press conference, Fed Chair Kevin Warsh said that forward-looking remarks are not well-suited in the current policy juncture.
FIIs remain net buyers for three straight trading days
Foreign Institutional Investors (FIIs) continue to increase their stake in the Indian stock market, extending the buying streak for three trading days on Tuesday. In the past three trading days, overseas investors have poured investment worth Rs. 1,991.55 crore. An improvement in sentiment of foreign investors towards Indian equities ahead of the start of the Q1FY27 earnings season underscores their optimism over quarterly earnings growth.
Technical Analysis: USD/INR falls to near 95.00
USD/INR trades lower at around 95.00, holding a neutral bias as spot has corrected to near the 20-day Exponential Moving Average (EMA), which is at 95.00. The pair is testing the breakout region of the Descending Triangle formation.
The Relative Strength Index (14) around 51 points to neutral momentum that neither signals overbought conditions nor strong downside pressure.
On the downside, immediate support is defined by the 20-day EMA at 95.00; a break below it would expose the pair to the May 7 low at 94.03. On the topside, a more meaningful resistance level is seen near the original descending trendline start point around 97, where a sustained break would open the way for a stronger bullish extension.
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