- Indian Rupee (INR) falls after gains last week
- Oil jumps 5% but remains below $100 per barrel
- The US Dollar (USD) is falling versus its major peers
- USD fell 1.8% this month after rising 2.2% in March
The US dollar-to-Indian rupee (USD/INR) exchange rate is rising after losses last week. The pair fell – 0.52% in the previous week, settling on Friday at 92.60. At 20:30 UTC on Monday, the pair is up 0.40% to 92.97 and trades between 92.56 and 93.18.
The Indian Rupee is falling as oil prices have jumped at the start of the week. While Iran reopened the Strait of Hormuz on Friday, the US continued its blockade of Iranian ports, prompting Iran to reimpose its own blockade on maritime traffic passing through the strait.
The strait remains closed for an eighth week, creating a severe shock to energy supplies. While oil prices fell 13% last week, they jumped over 5% on Monday amid supply concerns. Europe is particularly vulnerable to higher energy prices, given that it imports around 90% of its energy requirements.
Looking ahead, PMI data is due on Thursday and will provide a timely indication of how the economy is holding up in light of the energy shock.
The US dollar is rising against the Rupee but rising versus its major peers. The US Dollar Index, which measures the currency against a basket of major peers, trades -0.04% on Monday at 98.06 after losses last week.
The US dollar is falling on Monday on optimism that a tentative deal with Iran will still be reached, despite tensions escalating between Washington and Tehran over the weekend. The US has sent officials to Pakistan, and Iran is considering attending peace talks following efforts to end the US blockade of Iran’s ports, which is considered a major obstacle for Iran to rejoin negotiations.
While the US dollar rose initially, it has since given up those gains, falling lower on renewed hopes surrounding a resolution. The US dollar has fallen around 1.8% in April after jumping 2.3% in March on safe-haven demand following the outbreak of the US–Iran conflict.