On June 18, 2025, the Indian rupee is projected to open at a near two-month low. This is attributed to the increase in crude oil prices, fueled by escalating tensions between Iran and Israel. The one-month non-deliverable forward indicates an opening range of 86.38–86.42, compared to the previous 86.24.
Brent crude futures have risen over 4%, with the rally continuing through the Asian session. This increase is driven by concerns that the ongoing Iran-Israel conflict could disrupt supplies. The conflict has been ongoing for six days, and there is growing concern about potential direct U.S. military involvement. U.S. President Donald Trump has demanded Iran's unconditional surrender, and the U.S. is deploying more fighter aircraft to the region.
High oil prices typically negatively affect the Indian rupee due to India's reliance on crude oil imports. This leads to increased demand for dollars from oil companies and a worsening trade balance. The Federal Reserve's policy decision on Wednesday will also be closely watched, along with developments in the Middle East. While the Fed is expected to maintain current rates, market focus will be on signals regarding future rate cuts.