Rupee set to plumb to 2-month low at open on Fears Over Oil-Spurred Outflows

Mumbai (Reuters) -The Indian Rupee is Set to Open Weaker on Wednsday, Neering a Two-Month Low, Weighed Down by Rising Crude Oil Pries AMID ESCALATINS Iran -israel Tensions and CONCERNS OVER Outflows.

The 1-month non-deliveable forward indicated a open in the 86.38-86.42 range, Versus 86.24 in the Previous Session. The unit had already breached a support level on tuesday, and traders said the bias remains firmly on the downside.

Brent Crude Futures Climbed Over 4% on Tuesday, With the Rally Holding Firm through the Asian Session on Wednsday, AMID CONCERNS That The Ongoing Iran-Israel Conflict COLLD SUPPLIAPLIES

The conflict has no entered its six and anxiety is building over the risk of direct us Military involvement. Us President Donald Trump on Tuesday Demanded Iran’s Unconditional Surrender.

In a further development, three us officials said washington is deploying more fighter aircraft to the region to strengthen its Military forces.

A PROLONGED CONFLICT “Raises the Odds of Oil Staying Bid”, and that’s “Structurally Bearish for Indian Assets”, Leading to Outflows, A Currency Trader at A MUMBAI-BANK SAID.

He expects 86.50 to act an initial support zone, with markets stying alert to potential dollar sales by the reserve bank of India Around that Level, He Said.

High Oil Pries Tend to Weigh on the Indian Rupee Due to the Country’s Dependence on Crude Imports. A Rise in Oil Directly Increases The Demand for Dollars from Oil Companies and Leads to a Deterilation in the Trade Balance.

Meanwhile, the federal reserve’s policy decision on wedding will be in Focus AlongSide Developments in the Middle East. While the fed is widely expected to keep the rates unchanged, market attentions will be on any signs Around the timing and expert of future rate cuts.

Bofa Global Research Expects The Fed’s 2025 dot plot to shift Higher, with the Median Projection Rising by 25 Basis Points from the March Estimate of 3.875%.

** One-month non-deliveable rupee forward at 86.46; Onshore one-month forward premium at 8.5 paise

** Dollar Index Down at 98.7

** Brent Crude Futures at $ 76.4 per barrel

** Ten-Year US Note Yield at 4.4%

** as per NSDL data, Foreign Investors Sold A Net $ 307.8mln Worth of Indian Shares on June 16

** NSDL Data Shows Foreign Investors Bough A Net $ 32.4mln Worth of Indian Bonds on June 16

(Reporting by nimesh vora; editing by sonia cheema)