Rupee weakened past the 96-mark against the US dollar for the first time since late May on Tuesday, pressured by surging crude oil prices and heightened geopolitical tensions in West Asia that boosted demand for the safe-haven US currency.The domestic currency depreciated 48 paise to 96.16 against the US dollar in early trade after opening at 95.95 in the interbank foreign exchange market. On Monday, the rupee had settled 30 paise lower at 95.68 against the greenback.Forex dealers said the rupee came under pressure as investors rushed towards the US dollar amid rising geopolitical uncertainty, while higher crude oil prices added to concerns over India’s import bill.The rupee came under pressure due to a combination of factors — crude oil prices climbed on renewed geopolitical tensions, while demand for the US dollar increased as investors moved toward safe-haven assets, forex traders said.The US dollar index, which measures the greenback against a basket of six major currencies, was trading at 101.17, down 0.06%.Global crude oil prices continued their rally as the conflict between the United States and Iran intensified, fuelling fears of supply disruptions through the Strait of Hormuz, one of the world’s most important oil shipping routes. Brent crude, the global benchmark, rose 2.02% to $84.98 per barrel in futures trade.“India being a major oil importer, higher crude prices remain negative for the rupee,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, told PTI.Bhansali added that rising oil import costs have increased concerns over India’s current account deficit and trade balance, putting further pressure on the domestic currency.Indian benchmark indices Sensex and Nifty also declined in early trade, dragged by a sharp rally in crude oil prices due to the renewed flare-up in West Asia. The BSE Sensex initially fell 0.42% to 77,294.12, while the Nifty50 declined 0.64% to 24,144.60.Asian equity markets also traded lower as investors reacted to escalating military action in the Middle East and weakness in technology stocks.Japan’s Nikkei 225 declined 1%, while South Korea’s Kospi dropped 3.2%. China’s Shanghai Composite fell 0.8%, despite data showing exports jumped 27% in June from a year earlier, driven by strong demand for artificial intelligence-related technology. Hong Kong’s Hang Seng edged up 0.1%, while Australia’s S&P/ASX 200 slipped 0.5%.Oil prices climbed after the United States launched fresh strikes on Iran and President Donald Trump announced that Washington was “reinstating” a blockade on Iran in the Strait of Hormuz. The renewed fighting has disrupted tanker movement through the crucial waterway, raising fears of tighter global oil supplies and higher fuel prices.
