The Indian rupee is likely to slip past the 86-mark against the U.S. dollar as markets reel from a fresh oil shock and rising geopolitical tensions in the Middle East.
Traders expect the rupee to open between 86.02 and 86.10 per dollar, weaker than Thursday’s close of 85.60. This follows an 11% jump in Brent crude prices and a global sell-off in risk assets after Israel launched airstrikes on Iranian targets, including nuclear facilities and missile factories.
“The oil spike is worrying, but a prolonged Middle East conflict is a bigger threat to the rupee,” a Mumbai-based currency trader said. The 86.00–86.10 range is now seen as key support, but defending it could prove difficult amid continued uncertainty.
Israel declared the strikes are the start of a wider campaign to block Iran from developing nuclear weapons. Reports of explosions near Tehran have further intensified market anxiety.
Brent crude is now headed for its largest single-day gain in over three years, raising fears for India’s current account. Economists warn that every $10 rise in oil prices could widen the deficit by 0.4% of GDP and increase inflation by 35 basis points.
Safe-haven flows have strengthened the U.S. dollar, Japanese yen, and Swiss franc. The dollar index climbed to 98.05, while U.S. equity futures dropped 1.8%. Interestingly, U.S. 10-year bond yields fell despite the surge in oil.
Meanwhile, foreign investors offloaded $15.4 million in Indian equities and $296 million in bonds on June 11, as per NSDL data.
With geopolitical risks mounting, all eyes are on whether the rupee can hold the 86 level — or slide further in the days ahead.
Also Read: Rupee Wobbles as Oil Surges, Israel-Iran Tensions Spark Global Market Jitters
