USD/INR hits new record highs amid ongoing Iran conflict

Indian Rupee Hits Record Low Against US Dollar Amid Soaring Oil Prices

At the start of Monday’s trading session, the Indian Rupee (INR) plunged to a new historic low versus the US Dollar (USD), with the USD/INR pair opening sharply higher near 92.80. This decline is driven by escalating global oil prices and a strengthening US Dollar, fueled by risk-averse market sentiment.

According to BBC reports, the price of WTI crude on NYMEX has surged more than 25%, climbing above $110.00 per barrel, following coordinated strikes by the United States and Israel on Iranian oil facilities.

Countries like India, which are heavily dependent on oil imports to meet their energy requirements, are particularly vulnerable to fluctuations in oil prices. In contrast, the US Dollar tends to benefit from rising oil prices, as the United States is a net exporter of oil.

Currently, the US Dollar Index (DXY)—which measures the Dollar’s performance against a basket of six major currencies—has reclaimed a three-month high, reaching 99.70.

Commenting on the sharp increase in oil prices, US President Donald Trump remarked on Truth.Social that this was a “very small price to pay” in response to nuclear threats from Iran.

Impact on Indian Markets and Investor Sentiment

The spike in oil prices has significantly affected Indian equity markets. The Nifty50 index has dropped nearly 3%, falling below 23,750—a level not seen in over 11 months. As the conflict in Iran continues, foreign investors are withdrawing from Indian equities. Data from the NSE shows that Foreign Institutional Investors (FIIs) have been net sellers throughout all four trading days this month, offloading shares worth Rs. 21,831.19 crore.

Upcoming Economic Data and US Monetary Policy

On the economic front, market participants are awaiting India’s Consumer Price Index (CPI) data for February, scheduled for release on Thursday. In the US, inflation figures due on Wednesday are expected to be closely watched, although their influence on the Federal Reserve’s monetary policy outlook may be muted, as the data does not yet reflect the recent surge in gasoline prices linked to the Iran conflict.

The New York Times reports that average gasoline prices in the US reached $3.41 per gallon on Saturday.

Meanwhile, the CME FedWatch tool indicates that traders largely expect the Federal Reserve to keep interest rates unchanged over the next three policy meetings.

Technical Overview: USD/INR Approaches 92.80

As of now, the USD/INR pair is trading near 92.80, maintaining a bullish short-term outlook. The price remains above the rising 20-day Exponential Moving Average, confirming the recent upward momentum from the 91.00 region. The 14-day Relative Strength Index (RSI) stays elevated around 70, indicating persistent buying interest rather than signs of overextension. A series of higher daily closes since consolidating near 90.80 supports the ongoing upward trend, making pullbacks attractive buying opportunities as long as the pair stays above its recent breakout zone.

• Support Levels: Initial support is seen at 92.25, followed by 92.00, with stronger backing near the 20-day EMA at 91.60. A drop below this area could weaken the bullish outlook and target 91.25.
• Resistance Levels: Immediate resistance lies around 92.75. A decisive move above this could open the way toward the 93.20 region. The upward trend is expected to persist as long as the price remains above 92.25.

(This technical analysis was generated with the assistance of AI tools.)