Rupee Closes Weaker As Israel-Iran Tensions Escalate

The Indian rupee closed 16 paise weaker at 86.75 against the US dollar on Monday in comparison to its previous close of 86.59 on Friday. The currency's decline comes amid ongoing market uncertainty and geopolitical tensions.

The domestic currency opened 15 paise weaker at 86.74 against the US dollar.

"The Indian rupee depreciated against the dollar on Monday morning trade pressured by a rise in oil prices and weak risk appetite after US strikes on Iran," said Sriram Iyer, Senior Research Analyst at Reliance Securities.

Rupee continues to stay bullish above 85.74, supported by the 20-day simple moving average, said Ritesh Bhanshali, director, Mecklai Financial Service Ltd. Rupee will find support at 86.29 and 85.95, while the resistance stands at 86.90.

Additionally, the US dollar index extended gains to 99, as geopolitical tensions spiked following US airstrikes on three Iranian nuclear facilities over the weekend. "Markets are now closely watching for Tehran's response, while also eyeing upcoming US PMI and housing data for fresh insight into the domestic outlook," Bhanshali added.

Brent crude – the global benchmark for crude oil – fell 2.12% to $77.18 after a volatile trading week supported by fears of supply disruption despite Iran maintaining exports. Prices have fluctuated in a range of around $8 this week, with volatility spiking, options getting more bullish, and key spreads significantly widening in backwardation, according to Bloomberg.