Geopolitical tensions near the Strait of Hormuz spur caution ahead of Tuesday’s US-Iran negotiations, pressuring oil-linked currencies like the INR.
The Indian Rupee opened unchanged against the US Dollar on Monday, with the USD/INR pair trading near 94.35. Markets remain cautious ahead of US-Iran talks in Oman on Tuesday, following weekend clashes near the Strait of Hormuz, a key global oil chokepoint.
Recent hostilities between the US and Iran raised concerns over energy supply disruptions, though both sides agreed to a ceasefire. Iran’s Foreign Minister warned against bypassing its preferred routes in the strait, heightening geopolitical risks. Oil prices, which had stabilized near pre-conflict levels, could rise if tensions escalate, weighing on oil-import-dependent currencies like the INR.
The US Dollar Index remains steady as traders await this week’s US nonfarm payrolls data, adding to the cautious sentiment.