USD/INR continues to follow oil prices in lockstep as focus shifts to US-Iran negotiations. What's next?

USD/INR is tracking oil prices closely, with the direction of both currencies hinging on US-Iran developments. The piece notes that a breakthrough—such as a reopening of the Strait of Hormuz and de-escalation—could push oil lower, reduce expectations for Federal Reserve hikes, weaken the dollar and support the rupee. A prolonged standoff or renewed escalation would likely keep oil supported, strengthen the US dollar and weigh on INR. After oil rebounded when optimism faded, Treasury yields rose on stronger-than-expected US Flash PMIs, lifting the greenback. It also cites Iran’s fast-track offer to reopen the Strait within seven days if the US meets its terms, while the foreign minister stays in New York to await a response.