Rupee's recovery stalls as oil climbs and US yields surge
The rupee may weaken again as oil rebounds and the 10-year US Treasury yield climbs above 5% on expectations of more Fed rate hikes, per Reuters.
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what happened
According to Reuters, the Indian rupee's recent recovery may run out of steam on Friday. Oil is rising again after fresh strikes on Saudi energy facilities and shipping disruptions in the Strait of Hormuz, while the 10-year US Treasury yield jumped well above 5% after Donald Trump said Washington has no need for a deal with Iran.
The currency is expected to open weaker than the 94-per-dollar level, having slipped through it on Thursday in its sharpest one-day drop in almost three weeks. The rupee has failed to hold above that line for three straight sessions, peaking at 93.60 intraday before reversing. Traders suspect the Reserve Bank of India may be buying dollars, while oil importers could be returning to the spot market to cover their needs.
why it matters
Markets now price in a 25-basis-point Fed rate hike in December, with a small chance of a 50-point move, after hotter US inflation pushed Treasury yields higher. Expensive oil and rising yields together strengthen demand for the dollar and weigh on import-dependent currencies such as the rupee.
market impact
Rupee and oil: pressure pushes USD/INR higher, while Brent gains from attacks on Saudi energy assets
- USD/INR pressure up — a weaker rupee lifts the dollar's price against the Indian currency
- Brent pressure up — supply disruptions from Saudi infrastructure attacks and Hormuz shipping problems
- US 10-year Treasury yield pressure up — expectations of further Fed rate hikes after strong inflation data
tags
instruments
sources
- Rupee's faltering rally faces returning oil pressure, surging US yields — Reuters, 13 November 2026 at 03:08 UTC
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