The Indian rupee closed 18 paise weaker at 86.24, against the US dollar on Tuesday.
Rupee has closed at the lowest level since April 9. It had closed at 86.06 a dollar on Monday. The domestic currency opened flat at 86.07 against the US dollar today.
Earlier today, Brent oil prices rose to $74.04 per barrel following a warning from the US president regarding the Israel-Iran conflict, which has heightened concerns about potential supply disruptions. Conflicting reports about Iran seeking a ceasefire, along with soft economic data from China, have also impacted oil prices.
"Brent rose to $74.1 as Israel vowed more strikes on Iran, fuelling concerns over energy supply disruptions. (It is) now facing next hurdle near $76.11," said Ritesh Bhanshali, deputy chief executive officer at Mecklai Financial Service Ltd.
The US dollar had rebounded sharply, with the DXY climbing back above 98.2, as rising geopolitical tensions in the Middle East revived safe-haven demand. President Trump's call for the full evacuation of Tehran, following intensified Israeli airstrikes on Iranian military and media sites, has raised fears of a wider regional conflict, noted Bhansali.
"These developments have not only buoyed the dollar but also lifted gold to $3,390/oz and Brent crude to $73.5/bbl, reflecting heightened market anxiety. Markets are bracing for potential disruptions to energy flows and trade routes, while also eyeing the broader inflationary risks stemming from elevated oil prices," he added.
Focus now shifts to the Federal Reserve's policy decision, with rates expected to remain unchanged, according to Bhansali. A dovish forward guidance is anticipated as inflation risks from rising oil prices and weaker US data, including a sharp drop in the Empire State Manufacturing index.
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