• The USD/INR remains about a maximum of two months, lowering slightly to around 86.57 while the operators digest geopolitical risks and await the Federal Reserve policy verdict.
• The escalation of the Iran-Israel conflict and the increase in crude oil prices affect the currencies of emerging markets, adding pressure on the rupee.
• The operators are attentive to the monetary policy decision of the Federal Reserve and updated projections to obtain a new address, while the RBI works to align the domestic rates.

The Indian rupee (INR) remains downward against the US dollar (USD) on Wednesday, marking its second consecutive day of weakness, despite a relatively moderate dollar before the key decision on the interest rate of the Federal Reserve. The highest prices of Crude oil And the growing tensions between Iran and Israel continue to cloud the feeling, keeping the currencies of emerging markets, such as rupee, under pressure.

The USD/INR briefly rose to a maximum of two months of 86.75 at the beginning of the day, but since then it has dropped, quoting about 86.57 in the first hours of American negotiation while investors remain cautious.

The conflict between Iran and Israel has now entered its sixth day, without signs of de -escalated while both parties exchange strong attacks. The Israeli forces have continued to attack suspicious military and nuclear sites inside Iran, while Tehran has launched waves of missiles and drones in retaliation. The fighting has altered daily life in the Iranian capital, where the casualties are increasing, stores and markets have closed, and fuel shortages are causing long lines in the service stations. Meanwhile, global markets are nervous as the speculation that USA (USA) They could intervene if the conflict gets out of control.

Market movements: INR pressured geopolitical risks, RBI measures and Fed policy signs

• Increased tensions in the Western Asia region have revived the demand of the US dollar, promoting the US dollar index (DXY) on Tuesday while operators favor safe refuge assets. This state of risk aversion has triggered a capital escape from emerging economies, weighing even more about Indian rupee. With the dollar winning widely against the main peers, the rupee has struggled to find support, particularly without strong domestic drivers that compensate for external pressure.
• Despite the winds against external, the rupe has remained relatively stable, largely reflecting the trends of global currencies. A recent Bank of Baroda (Bob) report stressed that the healthy foreign exchange reserves of India continue to offer a solid mattress against possible episodes of volatility. Although persistent global uncertainties and the expiration of current tariff exemptions of the US could influence the feeling of the market, the Bob report said that the rupee is likely to be maintained within its early band if the prevailing conditions are stable. “We hope that the INR operates in the range of 85.25–86.25 in front of the USD in the short term. Risks persist if geopolitical tensions intensify even more,” “ The report pointed out.
• In an effort to refine its monetary transmission, the Bank of the Reserve of India (RBI) is collecting information from the market actors to better align the interest rate of the night interbank funds with its key repurchase rate. The interbank rate has been maintained persistently below the policy rate thanks to excess cash in the banking system. While this helps banks to lend at low cost, a too broad margin can boost excessive credit growth and increase inflation risks. Although inflation is maintained under control for now, experts warn that a mixture of geopolitical uncertainty and cheap funds could lead the RBI to reconsider their inflation objectives in the future.
• Despite these monetary challenges, India’s macroeconomic image remains robust. The ICRA qualification agency predicts that the growth of the Gross Domestic Product (GDP) of India will exceed 6.5 %in fiscal year 26 and the Gross Added value (VAB) will exceed 6.3 %, while the inflation of the consumer price index (CPI) is projected around 4.2 %.
• The BSE Sensex fell 0.2% to 81,440 and the NSEFTy 50 NSE lost 0.2% to 24,810, pressured by geopolitical nerves and inflation concerns driven by oil. “The domestic market failed to maintain the initial profits as tensions in Western Asia and volatile oil prices dragged the feeling,” Vinod Nair, Chief of Research at Geojit Financial Services said.
• The Brent crude is quoted about $ 75.55 per barrel, while the West Texas Intermediate (WTI) is around $ 73.47, slightly firmer as the operators balance the fears of fresh supply by the Iran-Israel crisis.
• Iran’s supreme leader, Ayatollah Ali Khamenei, issued a overwhelming warning to dawn, declaring on social networks that “the battle begins,” pointing out that it has no intention of going back. Just a few hours earlier, US President Donald Trump called Khamenei an “easy objective” and warned that the patience of America is running out, demanding the “unconditional surrender” of Iran. According to reports, Trump is weighing military options, including attacks on Iran’s nuclear facilities, as it becomes more skeptical about a purely diplomatic resolution. While the sources say that it has not completely ruled out the conversations, any agreement would probably depend on significant concessions by Iran.
• The US dollar index (DXY) is quoted slightly down on Wednesday, around 98.65 while operators remain outside before the decision on the interest rate of the Federal Reserve (Fed) that will occur later in the day. On Tuesday, the dollar had earned around 0.70% thanks to safe refuge flows, despite the weakest retail sales data than expected, since investors sought refuge of the growing geopolitical risks.
• Initial unemployment requests in the United States decreased by 5,000 to 245,000 for the week ending on June 14, coinciding with market forecasts. Despite the slight decrease, the applications are still high, marking the fifth highest reading since August 2023 and reinforcing the signals of a gradual cooling in the labor market.
• It is widely anticipated that the FED maintains the stable reference interest rate in the 4.25% –4.50% range while those responsible for policies remain cautious against the new uncertainty of the new tariffs and policy changes of President Trump. The operators will seek the economic projections updated to obtain clues on how the Central Bank sees the evolution of growth, inflation and future trajectory of interest rates.

Technical Perspective of the USD/INR: The bullish breakdues to 87.00 while the impulse remains strong

The USD/INR torque has made a clear rupture above a graphic pattern of symmetrical triangle of several weeks in the 4 -hour graph, pointing out a new bullish impulse. The rupture is backed by the mobile average of 21 periods (MA), which has turned up and now is about 86.19, acting as dynamic support.

The Relative Force Index (RSI) Ronda 68.61, approaching the overcompra territory but still without showing a reversal signal, indicating that the torque could extend its profits before any significant setback. Meanwhile, the exchange rate (ROC) remains slightly positive, reinforcing the case for a continuous bullish impulse.

If the torque remains above the area of ​​86.50–86.60, the next immediate resistance is seen about 87.00, a psychologically significant round figure. On the contrary, a fall below the rupture point and the MA of 21 periods could expose the new support test around 86.20 and then the previous consolidation base about 85.90.

In general, the technical image favors the USD/INR bulls in the short term, with a clear inclination to buy in the falls while the price is maintained above the rupture of the triangle and the medium mobile in the short term.