FX.co ★ Rupee Slides as Oil and US Yields Surge

The Indian rupee hovered around 96.1 per dollar after repeatedly setting new record lows in recent sessions, pressured by rising US Treasury yields, surging crude oil prices, and a broader risk-off tone in global markets. Selling pressure on emerging-market currencies intensified as the benchmark 10-year US Treasury yield climbed to 4.6250%, while Brent crude futures advanced nearly 2% to $111.34 per barrel amid stalled US–Iran nuclear talks.

Risk sentiment deteriorated further following reports of an attack on a nuclear facility in the UAE and expectations that US President Trump could weigh military options against Iran. Market participants anticipate the rupee will stay under pressure, with the Reserve Bank of India expected to prioritize smoothing excessive volatility rather than defending any specific exchange-rate level.

Separately, investors also digested data showing India’s unemployment rate rising to 5.2% in April 2026 from 5.1% previously, the highest since October. Elevated energy costs and disruptions to shipping lanes in the Persian Gulf have eroded purchasing power, adding to headwinds for the domestic economy.