• The Indian Rupee falls back against the US Dollar after hitting a fresh almost seven-week high.
• Surging oil prices weigh heavily on the Indian Rupee.
• Investors await flash India-US PMI data for October.

The Indian Rupee (INR) fails to extend its winning streak for the eighth trading day against the US Dollar (USD). The USD/INR pair rebounds sharply to near 94.91 after attracting signfiicant bids at around the seven-week low of 97.33. The Indian currency was outperforming in the fast few days; however, a significant jump in oil prices has faded the rally.

As of writing, the MCX Crude Oil contract expiring on November 19 is up 2.8% to near Rs. 9,500. Higher oil prices bode porrly for currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs.

Middle East tensions flare and US clarifies diplomatic pullback

Analysts at Deutsche Bank highlight that “several geopolitical headlines came through overnight that led to mounting concerns about a fresh escalation in the conflict,” prompting them to “start with the oil moves.” They note that this backdrop “dampened hopes for a near-term resolution, and oil prices have continued to rise over the last 24 hours.”

Commerzbank similarly points out that 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 bank, “oil prices briefly jumped on reports suggesting a wider withdrawal of US diplomatic personnel from the Gulf, but pared gains after Washington clarified that the order was limited to Saudi Arabia,” helping to contain the initial risk-driven spike.

What strengthened INR in past few days?

Plenty of tailwinds, including active intervention by the Reserve Bank of India (RBI) through spot and Non-Deliverable Forwards (NDFs) markets on several occasions, fresh measures announced to curb US Dollar’s demand and a significant inflow of foreign funds for the Jio Platforms Initial Public Offering (IPO) are fueling the rally in the Indian currency.

DBS Group Research highlights that the Reserve Bank of India has rolled out a “multi-layered defence strategy to support the rupee this year,” combining “outright intervention in spot/forwards, regulatory action, liquidity steps, administrative measures and moves to curb import-related dollar demand.” According to DBS, the authorities “are likely not done yet and remain ready to take further action, as required,” with RBI Governor Malhotra underlining the central bank’s resolve in a recent Moneycontrol interview on 13 October, stressing that “The RBI is determined to do whatever is necessary to ensure orderly movement in the foreign exchange market.”

Meanwhile, Reliance Industries-backed Jio Platforms has launched its ₹30,213 crore IPO on October 21, 2026, which will remain open until October 23, according to Groww.

India-US flash PMI data awaited

Investors keenly await the preliminary private sector Purchasing Managers’ Index (PMI) data of October for both India and the US, which is scheduled for Friday.

The US S&P Global PMI report will likely show that the overall business activity expanded again, but at a moderate pace.

USD/INR Technical Analysis

In the daily chart, USD/INR trades at 94.91, keeping a bearish near-term tone as it holds below the 20-day Exponential Moving Average (EMA) at 95.44. The moving average now acts as immediate dynamic resistance, suggesting rallies are likely to be sold while price remains capped beneath this gauge.

The Relative Strength Index (RSI) at 38.68 sits near oversold territory, hinting that downside momentum is stretched but not yet signaling a confirmed reversal.

On the topside, initial resistance is located at the 20-day EMA around 95.44, and a daily close above this level would be needed to ease the current bearish pressure and open the door to a corrective rebound. Looking down, the June 25 low at 94.15 is the key support level.

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

Economic Indicator

S&P Global Services PMI

The S&P Global Services Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US services sector. As the services sector dominates a large part of the economy, the Services PMI is an important indicator gauging the state of overall economic conditions. The data is derived from surveys of senior executives at private-sector companies from the services sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity among service providers is generally declining, which is seen as bearish for USD.

Next release: Fri Oct 23, 2026 13:45 (Prel)

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.