Rupee Tied to Oil Prices as Markets Weigh Iran Diplomacy Hopes

The Indian rupee is expected to open nearly flat on Wednesday, around 95.60-95.65 per dollar, as traders gauge the impact of US-Iran diplomatic efforts on oil prices.

Oil markets remain a key driver for Indian assets, with Brent crude futures hovering near two-week lows at $99.22 per barrel.

Hopes of a diplomatic solution to the West Asia war have moderated oil prices somewhat from highs, but analysts at MUFG caution that 'the path forward remains unclear given the lack of clarity around a possible resolution of the conflict.'

The rupee has been under pressure due to weakness in capital flows and an elevated energy bill, partially absorbed by frequent central bank interventions.