Traders said the bias remains negative, with high crude oil prices and rising geopolitical tensions adding to the pressure.
Brent crude surged over 4% on Tuesday (June 17) and stayed elevated through Asian trade on Wednesday (June 18). The gains came amid escalating tensions in the Middle East, where the Iran-Israel conflict has now entered its sixth day.
US President Donald Trump has called for Iran’s unconditional surrender, while the US is deploying additional fighter jets to the region. Market participants are worried about the risk of a wider conflict and potential US military involvement.
A Mumbai-based currency trader said:
“High oil prices hurt Indian assets and may trigger foreign outflows. That’s structurally bearish for the rupee.”
The trader added that 86.50 may act as a support level, with markets watching for possible intervention from the Reserve Bank of India (RBI) if the rupee weakens further.
India, being a major crude importer, sees its trade balance and currency impacted by rising oil costs. As oil prices climb, demand for dollars from Indian oil companies increases.
Investors are also tracking the US Federal Reserve’s policy decision due later on Wednesday (June 18). While the Fed is expected to hold rates steady, traders are looking for cues on the timing of future rate cuts.
BofA Global Research expects the Fed’s 2025 dot plot to shift higher, indicating a more hawkish outlook.
–With Reuters inputs
First Published: Jun 18, 2025 10:59 AM IST
