Rupee slides to 91.50 per dollar on risk-off markets

The rupee closed at 91.50 (provisional) against the U.S. dollar after a steep session in which it opened at 91.23 and hit an intraday low of 91.65, traders said. The drop of 42 paise from the previous close came as global risk aversion intensified following US and Israeli actions in the region, fueling a rally in crude prices and pushing demand for the greenback higher. On Friday, the rupee had settled at 91.08 per dollar, underscoring a streak of weakness in the local currency amid mounting tensions.

Analysts described a risk-off backdrop weighing on the rupee as investors pulled funds from domestic equities and sought safer assets. They noted that RBI was present around the 91.46/47 levels, providing some support to the currency around the 91.50 mark. The broader picture remains dictated by external developments, including geopolitical tensions and shifts in crude oil prices, rather than domestic fundamentals alone.

In terms of ranges, market participants expect the USD/INR pair to trade between roughly 91.10 and 91.80 in the near term, with limited upside if diplomatic talks between major players offer any respite. One researcher suggested the rupee could find relief if talks between the US and Iran materialize or if there is RBI intervention at uncomfortable levels. Traders will also monitor additional cues from the US market, including upcoming manufacturing data, which could inject further volatility into currency moves.

On the pricing front, the dollar index rose about 0.67% to 98.22, while Brent crude oil futures surged around 8% to roughly $78.71 per barrel, reinforcing the pressure on the rupee through higher import costs. Analysts highlighted that the combination of elevated crude prices and persistent geopolitical risk is likely to continue shaping the currency’s trajectory in the near term, unless there is a notable shift in the global risk environment or a clearer path toward de-escalation.

Overall, the mood across currency desks remains cautious. Traders will be watching for any diplomatic developments, RBI policy direction, and evolving oil prices, all of which could tilt the rupee away from or toward the 91.50 level in the days ahead.

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