Rupee Weakens Against US Dollar Amid Rising Oil Prices and Geopolitical Tensions

Rupee began Wednesday on a weak note against the US dollar, surrendering gains it made in the previous session.

The currency began the day at 95.15 in the interbank foreign exchange market and slipped to 95.16 in early trade, a decline of 20 paise from its previous close of 94.96 against the greenback.

On Tuesday, rupee had ended 47 paise stronger against the greenback.

The dip came as rupee crude oil prices rose once again and the US dollar continued to strengthen after fresh military action involving the US and Iran.

Apart from higher oil prices, a weak opening at Dalal Street also weighed the currency down, forex traders said.

Commenting on the currency's movement, Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said, "The rupee opened at 95.15 levels on Wednesday as the dollar index moved higher and Brent crude touched USD 76 levels with most Asian currencies also falling against the dollar."

The dollar index, which measures the US currency against a basket of six major currencies, edged up 0.06 per cent to 101.08.

At the same time, Brent crude futures climbed 2.55% to $76.05 a barrel after the US launched fresh strikes on Iran following Tehran's attack on three ships in the Strait of Hormuz.

Bhansali also said the US Energy Information Administration (EIA) has projected Brent crude to average USD 74 per barrel in the third quarter of 2026, which is $27 lower than the forecast issued last month.

Domestic stock markets mirrored the cautious sentiment. The BSE Sensex dropped 537.83 points to 77,642.89 in early trade, while NSE Nifty declined 163.55 points to 24,235.15.

Meanwhile, foreign institutional investors remained net buyers on Tuesday, purchasing equities worth Rs 393.19 crore, according to exchange data.