The rupee has weakened 1.5% over the last seven sessions, as Brent crude pushed above $107 and the dollar index climbed to 99.61, signalling increased dollar demand.
Brent crude was trading around $107.71 a barrel, after touching $108 earlier, amid concerns over supply disruptions linked to escalating tensions in the West Asia. Higher crude prices can boost India's import bill and raise dollar demand from oil importers, squeezing the rupee.
The focus has shifted to the US Federal Reserve's policy decision later on Wednesday. Interest‑rate futures are pricing in more than a 90% probability of a Fed rate hike, up from about 60% a week earlier, according to the CME FedWatch Tool.
Traders are watching key levels: the rupee breached the 95.80 support on Tuesday, and a sustained move beyond 96‑per‑dollar could shape near‑term direction. Mirae Asset Sharekhan’s Anuj Choudhary estimated a spot range of 95.75‑96.15, while HDFC Securities’ Dilip Parmar placed resistance at 96.30 and support at 95.45.
The Reserve Bank of India has been intervening in the currency market to manage volatility, as participants report. Meanwhile, India's foreign exchange reserves rose to a record $785.706 billion, up $44.903 billion in the week ended September 4, per RBI filing.