FX.co ★ Rupee Rally Stalls on Rising Oil Prices, Dollar Demand

The Indian rupee traded near 94.8 per US dollar, edging back from recent multi-week highs as rising oil prices and a broader flight to safety weighed on the currency. Persistent demand for dollars also threatened to cap any further appreciation. Brent crude approached USD 115 per barrel amid concerns over supply disruptions following Houthi attacks in Saudi Arabia, pushing up India’s import bill and potentially prompting additional hedging activity by importers. The rupee’s eight-session winning streak came to an end on Thursday, with the currency retreating from a more than six-week high around 94.30. While the RBI’s recent foreign-exchange measures have helped temper dollar demand and offered some support to the rupee, they have yet to resolve the underlying pressures stemming from elevated oil prices and ongoing capital outflows.