Indian Rupee surrenders weekly gains as oil prices climb further

• Rising oil prices push the Indian Rupee further down against the US Dollar.
• Energy supplies remain at risk as Middle East tensions persist.
• October’s flash HSBC Global PMI readings point to continued strength in India.

USD/INR climbs to around 94.92 on Friday as the surge in oil prices linked to Middle East tensions puts heavy pressure on the Indian currency. Extending Thursday’s decline against the US Dollar (USD), the Indian Rupee has surrendered almost all of its gains from earlier this week.

A 0.65% rise in early trading takes the MCX Crude Oil contract expiring on 19 November to around Rs. 9,550. That leaves the oil price near the recent high of Rs. 9,661 reached earlier this week.

For economies such as India, where energy needs are met largely through oil imports, rising crude prices are unfavourable for the currency.

Middle East tensions intensify following Saudi drone attack

Although the eventual effect on crude prices was limited, Commerzbank analysts say Middle East tensions “intensified after a drone attack on Saudi Arabia's Shaybah oil field killed two people and injured two others,”. According to the analysts, “oil prices briefly jumped on reports suggesting a wider withdrawal of US diplomatic personnel from the Gulf,” but those gains subsequently faded as “Washington clarified that the order was limited to Saudi Arabia,” leading the market to give back its earlier advance.

Fears of a further escalation in military aggression in Iran have grown following the withdrawal of non-emergency US personnel from the Gulf.

India’s private sector maintains robust output in October

India’s Composite Purchasing Managers’ Index (PMI) rose to 56.7 in the preliminary HSBC Global release for October, compared with September’s final reading of 55.9. Overall business activity remained strong, with robust services activity driving the substantial improvement in the Composite PMI.

Pranjul Bhandari, Chief India Economist at HSBC, said: “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,”

Markets turn to forthcoming US PMI release

October’s preliminary US S&P Global PMI figures are due at 13:45 GMT, with investors awaiting the release. Expectations are for another expansion in both manufacturing and services activity, albeit at a moderate pace.

USD/INR retains bearish bias in technical outlook

Below its 20-day exponential moving average (EMA) of 95.38, USD/INR retains a bearish near-term bias, trading at 94.92 on the daily chart.

Following a steep retreat from recent highs, the pair’s Relative Strength Index (14) stands at 37.94, only just above oversold territory. This suggests that downward momentum persists, although selling pressure may be easing.

Recovery attempts face immediate resistance at the 20-day EMA near 95.38. The pair would need to regain that level to relieve the prevailing downside bias. Below the market, key support lies at the 25 June low of 94.15.

(The technical analysis of this story was written with the help of an AI tool. Know more.)