Indian Rupee Slides Near 85.60 Against Strengthening US Dollar

The Indian rupee has weakened against the US dollar due to a strengthening greenback and rising international oil prices, trading around 85.63–85.71 recently amid month-end demand pressures from exporters and importers. The US dollar's strength is supported by improved consumer confidence figures and a rising dollar index, which has climbed above 99, while global crude oil prices have also increased, adding pressure on the rupee as India is a major oil importer. Despite foreign portfolio investor outflows totaling nearly $2.1 billion recently, the rupee showed some recovery due to a weak dollar outlook driven by concerns over US fiscal policy and a robust domestic economy indicated by strong manufacturing and services PMI data. Market participants expect the rupee to trade within a range of 85 to 85.60 in the near term, with exporters advised to hedge near 85.50/60 and importers waiting for a dip below 85.00 to buy dollars. The rupee's volatility, reflected in rising implied volatility above 6%, underscores investor caution amid global economic shifts, US treasury trends, and regional market movements, which could influence capital flows and financial stability in emerging markets.