The 12-paise slide comes after a sharp rally in Brent crude, which climbed nearly 2% on Wednesday to $95 a barrel, and a 10-year U.S. Treasury yield that has surged to its highest level since 2007.
Brent's jump pushed September gains to about 14% from the start of the year, adding pressure on India's dollar‑denominated import bill and driving up demand for U.S. dollars.
The 10-year yield’s rise, coupled with fading expectations of an October Fed rate hike, has kept longer‑term U.S. yields elevated, a backdrop that has pressured the rupee despite softer‑than‑expected August CPI.
During the session, traders noted that the Reserve Bank of India is likely to intervene to prevent a sustained breach above the ₹96 level, a psychological and technical barrier that has seen the rupee rebound after past interventions.
Looking ahead, market watchers will keep an eye on RBI’s next policy meeting, the Fed’s October meeting, and the trajectory of oil prices. If U.S. yields remain high and oil stays elevated, the rupee may continue to test the ₹96 ceiling.