The rupee weakened 12 paise to 96.42 against the U.S. dollar in early trade on Monday (July 20, 2026) due to a surge in crude oil prices and strong demand for the American currency amid the worsening West Asia crisis.

Foreign capital outflows from domestic equity markets also weighed on the Indian currency, forex traders said.

At the interbank foreign exchange, the rupee opened lower at 96.53 against the previous close of 96.30 to the dollar. The local unit pared some losses to trade at 96.42 later, down 12 paise from its previous close.

On Friday (July 17, 2026), the rupee gained 12 paise to settle at 96.30 against the U.S. dollar, supported by positive domestic market sentiment and a decline in U.S. Treasury yields.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading marginally down by 0.05% at 100.54.

Brent crude, the global oil benchmark, was trading 2.45% higher at $90.26 per barrel in futures trade, as the U.S. and Iran have inched closer to all-out war, as last month’s interim deal meant to permanently end the fighting has crumbled and shipping traffic in the Strait of Hormuz has largely stalled.

The United States conducted a new round of airstrikes early on Monday (July 20, 2026) targeting Iran after announcing the death of another American service member, and Iran fired missiles towards Jordan that risked widening the conflict into neighbouring Israel.

Meanwhile, Bahrain sounded its missile alert sirens Monday morning (July 20, 2026), warning of an Iranian retaliatory attack after U.S. airstrikes targeted the Islamic Republic.

On the domestic equity market front, the Sensex tumbled 593.78 points, or 0.76%, to 77,557.67, while the Nifty declined 169.20 points, or 0.70%, to 24,165.10.

Foreign Institutional Investors offloaded equities worth ₹376.41 crore on a net basis on Friday (July 17, 2026), according to exchange data.

The Reserve Bank data released on Friday (July 17, 2026) showed India’s forex reserves jumped $964 million to $675.157 billion in the week ended July 10. In the previous reporting week, the overall kitty had jumped by $7.26 billion to $674.193 billion.