USD vs INR: Rupee tumbles to all-time low amid oil price shock; Check key levels

USD vs INR: Rupee plunged to a record low against the US dollar on Monday. The fall came as global crude oil prices surged and demand for the greenback increased.

The currency opened at 92.20 against the US dollar. It later slipped to 92.528 in early trade. This marks the weakest level ever for the rupee.

The rupee had already ended weaker in the previous session. It had settled at 91.82 on Friday, down by 18 paise.

Add Zee Business as a Preferred Source

Crude oil surge puts pressure on rupee

The sharp fall in the rupee came after a steep jump in crude oil prices.

Brent crude, the global oil benchmark, surged more than 25 per cent to around $118 per barrel in futures trade. The rally followed rising tensions in the Middle East after the conflict between the US-Israel alliance and Iran intensified.

India is one of the largest crude oil importers. When oil prices rise, the country needs more dollars to pay for imports. This increases demand for the US currency and puts pressure on the rupee.

Dollar index volatile amid weak US data

According to Manoj Kumar Jain, Director Prithvi Finmart, the dollar index has shown high volatility in recent sessions.

The dollar index settled at 98.87 on Friday, down 0.47 per cent. The decline came after weak US economic data.

US non-farm payrolls fell by 92,000, against expectations of a rise of 58,000. The US unemployment rate also increased to 4.4 per cent.

Weak labour data triggered a sell-off in US equities. This pushed the dollar index lower. However, record gains in crude oil prices and geopolitical tensions are still supporting the dollar.

Experts see wide trading range for rupee

Jain said the dollar index could remain volatile this week due to global market swings, inflation worries and geopolitical tensions.

He expects the index to trade in the range of 97.20 to 100.40.

On the domestic side, the rupee remains under pressure. Heavy selling in Indian equities and the surge in crude oil prices have weakened the currency.

However, a rise in India’s foreign exchange reserves could offer some support to the rupee at lower levels.

Jain expects the USD-INR pair to remain volatile and trade between 90.66 and 93.55 this week.

USD-INR performance across timeframes

The US dollar has strengthened against the rupee across multiple timeframes. Data shows the USD-INR pair rising 0.57 per cent in one day and 0.95 per cent over the past week. The pair has gained 1.88 per cent in the last one month and 2.83 per cent in the past three months, indicating continued pressure on the Indian currency.

The longer-term trend also reflects rupee weakness. The USD-INR pair is up 4.77 per cent in the past six months and 6.15 per cent over one year. Over a five-year period, the dollar has strengthened 27.04 per cent against the rupee.

Technical view on USD-INR

The USD-INR March futures contract gained last week and touched record levels. On technical charts, the pair is trading above its key moving average support of 91.45.

Momentum indicators remain positive. The relative strength index (RSI) is above 60, while the MACD shows a bullish crossover.

Key support for the pair is seen at 91.45 and 91.08. Resistance is placed around 92.20 and 92.55.

Jain suggests buying USD-INR on dips in the range of 91.60 to 91.20. A stop loss can be kept at 90.85, with targets of 92.20 to 92.50.