Indian Rupee wipes out weekly gains as oil prices continue to rise

The Indian Rupee extends Thursday’s weakness against the US Dollar (USD) in Friday, wiping out almost entire gains made earlier this week. The USD/INR pair jumps to near 94.92 as surging oil prices due to Middle East tensions have weighed heavily on the Indian currency.

In the opening trade, the MCX Crude Oil contract expiring on November 19 is up 0.65% to near Rs. 9,550. The oil price is close to its recent highs of Rs. 9,661 posted earlier this week.

Higher oil prices bode poorly for currencies from economies, such as India, which rely heavily on its imports to meet their energy demands.

Middle East tensions flare after Saudi drone attack

Analysts at Commerzbank report that Middle East tensions “intensified after a drone attack on Saudi Arabia's Shaybah oil field killed two people and injured two others,” but note that the impact on crude was ultimately contained. They highlight that “oil prices briefly jumped on reports suggesting a wider withdrawal of US diplomatic personnel from the Gulf,” before the move faded as “Washington clarified that the order was limited to Saudi Arabia,” prompting the market to pare earlier gains.

The withdrawal of US non-emergency personnel from Gulf has prompted fears that military aggression in Iran could escalate further.

India’s private sector output remain robust in October

According to the preliminary HSBC Global Purchasing Managers’ Index (PMI) data for October, the overall business activity remained stronger. The Composite PMI arrives at 56.7, higher than the final reading of 55.9 in September. Strong service sector activity led to a significant increase in the Composite PMI.

“Private-sector manufacturing activity continued to expand, with growth of output and new orders broadly unchanged at last month’s levels. However, the steady pace of new order growth masks the fastest increase in new export orders since June 2025. Manufacturers responded by increasing their stocks of purchases and finished goods. Input cost inflation eased, while the rise in selling prices softened to its weakest in almost four years,” Pranjul Bhandari, Chief India Economist at HSBC, said.

US PMI data awaited

Investors await the preliminary US S&P Global PMI data for October, which will be published at 13:45 GMT. Both manufacturing and the service sector activities are expected to have expanded again, but at a moderate pace.

USD/INR Technical Analysis

In the daily chart, USD/INR trades at 94.92, keeping a bearish near-term tone as it holds below the 20-day exponential moving average (EMA) at 95.38.

The pair has retreated sharply from the recent highs, and the Relative Strength Index (14) at 37.94 stays just above oversold territory, suggesting that while downside momentum is still present, selling pressure may be losing some intensity.

On the topside, immediate resistance is located at the 20-day EMA around 95.38, which caps recovery attempts and will need to be reclaimed to ease the current downside bias. Looking down, the June 25 low at 94.15 is the key support level.