Indian rupee set to open lower as US yields rise and oil prices climb

The Indian rupee is expected to open weaker on Monday, trading in a 96.08‑96.12 band, after Friday’s close at 95.9650 and an all‑time low of 96.1350 per dollar [1]. The slide follows a fresh surge in U.S. Treasury yields— the 10‑year benchmark rose four basis points to 4.625%—and a near‑2% jump in Brent crude to $111.34 a barrel, both fueling a risk‑off mood across emerging markets [1].

Traders say the RBI stepped in on Friday, pushing the rupee back above the 96 mark, but the central bank is likely to focus on tempering the pace of decline rather than reversing it [1]. Higher yields raise the cost of holding dollars, while soaring oil prices stoke inflation concerns in India, a net oil importer. The dollar index climbed to 99.40, and the Indonesian rupiah fell more than 1%, underscoring the broader pressure on Asian currencies [1].

Geopolitical tensions added to the mix. A nuclear plant in the United Arab Emirates was attacked, and President Donald Trump is expected to discuss military options on Iran, keeping the Iran‑U.S. conflict unresolved and pushing yields higher [1]. The combination of tighter U.S. monetary expectations, elevated oil prices, and heightened geopolitical risk has already dented regional equity indices, which fell in line with U.S. futures [1].

The rupee’s trajectory will hinge on how the RBI balances intervention with market forces. If yields keep climbing and oil stays above $110, the currency could test the 96.12 ceiling again. Conversely, any de‑escalation in the Middle East or a pullback in U.S. yields may give the rupee room to stabilise. The next move will reveal whether the RBI can shield the currency from external shocks or if the broader risk‑off wave will force further depreciation.