USD/INR refreshes all-time highs as Indian Rupee sinks amid oil shock

• The Indian Rupee sinks to a fresh all-time low at around 92.80 against the US Dollar amid escalating Iran conflict.
• Oil prices climb over 25% above $110 as the US and Israel attack several Iranian oil depots.
• Investors await the US/India CPI data for February.

The Indian Rupee (INR) sinks to a fresh all-time low against the US Dollar (USD) on Monday, with the USD/INR pairsurging to near 92.80. The pair rallies as the Indian Rupee faces the heat of the boiling oil prices, and the US Dollar strengthens due to risk-off market sentiment and higher oil prices.

On the NYMEX, WTI oil price is up over 25% above $110.00 as the United States (US) and Israel, in a joint operation, have started hitting oil depots in Iran, BBC reported.

Currencies from nations like India that rely heavily on oil imports to fulfill their energy needs remain highly sensitive to changes in oil prices. Meanwhile, rising oil prices are a favorable situation for the US Dollar, given that the US is the net exporter of oil.

As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, reclaims its over three-month high of 99.70.

Regarding the massive rally in the oil price, US President Donald Trump stated through a post on Truth.Social that it is a “very small price to pay” against Iran’s nuclear threats.

Surging oil prices have badly impacted the Indian stock markets. Nifty50 dives almost 3% below 23,750, the lowest level seen in over 11 months. Meanwhile, foreign investors continue to dump their stake in the Indian equity market as the Iran war rages on. Foreign Institutional Investors (FIIs) have remained net sellers in all four trading days so far this month, and have offloaded their stake worth Rs. 21,831.19 crore, according to data from NSE.

On the macroeconomic front, investors will focus on the Consumer Price Index (CPI) data for February, which will be released on Thursday. Also in the US, the inflation data on Wednesday will be a major trigger; however, its impact on speculation for the Federal Reserve’s (Fed) monetary policy outlook would be limited as it lacks the impact of surging gasoline prices amid the Iran conflicts.

The price of gas in the US reached an average of $3.41 per gallon on Saturday, according to The New York Times (NYT).

According to the CME FedWatch tool, traders are confident that the Fed will not cut interest rates in the upcoming three policy meetings.

Technical Analysis: USD/INR sees more upside as 20-day EMA rises upwards

USD/INR trades higher at around 92.80 as of writing. The pair maintains a bullish near-term bias as price extends above the rising 20-day Exponential Moving Average, confirming the latest upswing from the 91.00 area. Momentum remains firm, with the 14-day Relative Strength Index (RSI) holding in the 70 zone, signaling strong buying pressure rather than exhaustion at this stage. The sequence of higher closes since mid-range consolidation around 90.80 reinforces the upside structure and keeps dip-buying favored while the pair holds above its recent breakout region.

Initial support emerges at 92.25, where a minor pullback base formed ahead of the current high, followed by 92.00 as the next downside level before stronger support near the 20-day EMA around 91.60. A break below this cluster would weaken the bullish tone and open room toward 91.25. On the topside, immediate resistance stands at the 92.75 area, with a sustained break exposing the 93.20 region as the next upside objective. As long as price holds above 92.25, the path of least resistance remains to the upside.

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