Further oil price rises erase Indian Rupee’s weekly gains

• Higher oil prices drive further Indian Rupee losses against the US Dollar.
• Energy supplies remain at risk as Middle East tensions persist.
• October’s flash HSBC Global PMI readings show continued strength in India.

USD/INR jumps towards 94.92. Extending Thursday’s decline against the US Dollar (USD), the Indian Rupee gives up almost all of its earlier gains this week on Friday. Oil prices surging on Middle East tensions have put the Indian currency under heavy pressure.

Early trading sees the MCX Crude Oil contract for November 19 expiry rise 0.65% to around Rs. 9,550. That leaves the price near its recent high of Rs. 9,661 reached earlier this week.

For economies such as India, heavy reliance on imported oil to meet energy needs makes higher crude prices a negative for their currencies.

Saudi Drone Attack Escalates Middle East Tensions

The impact on crude ultimately remained contained, according to Commerzbank analysts, despite Middle East tensions that “intensified after a drone attack on Saudi Arabia's Shaybah oil field killed two people and injured two others,” they report. Describing the initial reaction, they note that “oil prices briefly jumped on reports suggesting a wider withdrawal of US diplomatic personnel from the Gulf,” but the rally faded after “Washington clarified that the order was limited to Saudi Arabia,” leading the market to trim its earlier gains.

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

October Private Sector Output Holds Firm in India

At 56.7, India’s Composite PMI exceeds September’s final reading of 55.9. Preliminary HSBC Global Purchasing Managers’ Index (PMI) figures for October show stronger overall business activity, with robust services activity driving the significant rise in the composite measure.

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,”

13:45 GMT: US Flash PMI Due

The preliminary October US S&P Global PMI release is due at 13:45 GMT, with investors awaiting the figures. Expectations point to another expansion in both manufacturing and services activity, though at a moderate pace.

USD/INR: Technical Outlook

At 94.92 on the daily chart, USD/INR remains below its 20-day exponential moving average (EMA) of 95.38, preserving a bearish short-term bias.

Following a steep pullback from recent highs, the pair’s Relative Strength Index (14) stands at 37.94, just above oversold territory. Downward momentum therefore persists, although selling pressure may be easing.

A recovery must first clear immediate resistance at the 20-day EMA near 95.38 to reduce the prevailing downside bias. This level continues to limit rebounds. On the downside, key support lies at 94.15, the June 25 low.

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