The Indian Rupee stayed weak against the US Dollar on Friday, with USD/INR near 91.20. The move followed higher oil prices and limited foreign buying in Indian shares. Oil prices rose after reports that the US could take military action against Iran. The Wall Street Journal said President Donald Trump is weighing a limited strike. When oil prices rise, currencies in oil-importing countries often weaken.

Oil Prices And Rupee Pressure

Foreign Institutional Investors were net sellers in February. They reduced holdings by Rs. 1,076.63 crore, based on NSE data. On Thursday, overseas investors sold Rs. 880.49 crore. Reuters reported that traders believe the Reserve Bank of India likely intervened in local and spot markets to support the Rupee. India’s HSBC Composite PMI eased to 59.3 in February from 59.4 in January. The US Dollar Index traded near 98.00, a four-week high. FOMC minutes suggested the Fed is not in a hurry to cut rates while inflation remains above the 2% target. Markets also watched US preliminary Q4 GDP, expected at a 3% annualised pace versus 4.4% in Q3 2025, as well as the February S&P Global PMI. USD/INR was around 91.10 and above the 20-day EMA at 90.89, with the 14-day RSI at 54.99. Resistance was seen near 91.66, with support near 90.15.

Technical Levels And Outlook

Current conditions point to a weaker Rupee and a stronger US Dollar. The main drivers are higher oil prices tied to geopolitical tensions and continued foreign selling in Indian markets. As a result, USD/INR is trading near 91.20, and we expect the uptrend to continue. Higher oil prices are a major challenge for the Rupee because India imports most of its oil. Brent crude futures for April delivery rose more than 8% this week and traded near $115 a barrel, similar to early 2022. Higher oil prices increase the need for US Dollars among Indian importers, which adds pressure on the Rupee. Foreign outflows are adding to the strain. Foreign institutional investors have sold a net Rs. 1,076.63 crore so far this month. A similar run of outflows appeared in late 2025 when global risk aversion increased. Lower foreign demand removes an important support for the Rupee. At the same time, the US Dollar remains strong. The Fed’s meeting minutes indicate policymakers are not ready to cut rates soon. Recent US CPI data also shows core inflation still around 3.1%. This keeps US yields relatively attractive and supports demand for dollars, especially compared with currencies facing domestic headwinds. We think the Reserve Bank of India is trying to slow the Rupee’s decline by selling dollars. However, this may not be enough to change the trend. India’s foreign exchange reserves fell by about $5 billion in the latest reported week to $640 billion, which can limit how long heavy intervention can continue. Overall, market forces still point to a weaker Rupee in the near term. Over the coming weeks, traders may position for a further rise in USD/INR. One approach is to buy USD/INR call options with strike prices around 91.50 and 92.00 for the March expiry. This strategy targets upside while limiting risk to the premium paid. We will watch the 20-day EMA near 90.89 as an important support level for this bullish view. A sustained move above the January low at 91.66 would confirm upside momentum. A break above that level could open the door to a test of the 92.00 psychological level. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now