Rupee Watch: Rupee opens weaker as Middle East tensions push oil higher

• Rupee weakens to 94.94 against dollar amid Middle East tensions
• Brent crude rises to $104.65, supporting dollar strength
• Asian currencies mostly decline; Taiwan dollar and renminbi gain

The Indian rupee opened weaker against the $ on May 11, tracking losses in most Asian currencies after the $ and Iran rejected each other’s peace proposals aimed at ending the ongoing conflict in the Middle East. Markets also weighed comments by Prime Minister Narendra Modi urging Indians to help conserve foreign exchange reserves by curbing certain expenses.

At 9:02 am, the rupee was trading at 94.94 against the $, down 0.48 percent from its previous close of 94.48.

Brent crude prices remained elevated at $104.65 per barrel, keeping the dollar supported after President Donald Trump rejected Iran’s response to the peace proposals, while Israel reiterated that the conflict with Iran was far from over. Brent crude was trading 3.32 percent higher compared to Friday’s close in New York trade.

Trump also said he had a productive call with Israeli Prime Minister Benjamin Netanyahu, who stated that the war with Iran would continue until Iran’s nuclear enrichment facilities and proxy networks are dismantled. Israeli attacks on Lebanon continued, while Hezbollah claimed drone strikes on Israeli military camps. The United Arab Emirates also said it intercepted drones launched from Iran, adding to concerns over continued escalation in the region.

Asian currencies largely traded weaker. The South Korean won declined 0.88 percent, the Philippines peso fell 0.7 percent, the Thai baht dropped 0.62 percent and the Japanese yen weakened 0.31 percent. The Indonesian rupiah and Malaysian ringgit fell 0.2 percent each, while the Singapore dollar declined 0.17 percent. Among gainers, the Taiwan dollar and the Chinese renminbi rose 0.6 percent each.

According to data released by the $ Bureau of Labor Statistics, non-farm payrolls increased by 115,000 jobs in April, surpassing economists’ estimates of 63,000. Meanwhile, the unemployment rate remained steady at 4.3 percent, signalling continued resilience in the labour market despite broader economic uncertainty.

Markets are now focused on the upcoming CPI report due Tuesday, with economists expecting core inflation to remain steady at an annual rate of 2.6 percent. Retail sales data later this week is also expected to provide further signals on consumer demand and the broader economic outlook.