USD/INR hits record 94.40 as Middle East turmoil drives risk-off and RBI intervenes

USD/INR jumped to a record near 94.40, then broke the 94.00 psychological level as Middle East conflict escalated and markets shifted into risk-off mode. Trading volumes reportedly rose to ~150% of the 30-day average, reflecting heavy hedging and speculative demand. RBI intervention in spot and forward markets is reported, but effectiveness appears limited because global dollar demand is stronger. The rupee also faces persistent fundamentals: a widening US–India interest-rate differential and higher USD demand from India’s large crude oil import exposure as Brent rose above $105. On the flow side, foreign investors reportedly sold about $850m of Indian equities and debt over two sessions, reinforcing rupee weakness. Technically, USD/INR moved above the 200-day moving average and out of a multi-month consolidation range, with upside targets discussed near 95.50 if momentum holds. Traders should treat USD/INR strength as a proxy for global tightening and volatility, which can pressure broader crypto risk appetite. Key levels to watch: support around 94.00 and potential upside toward 95.50, with RBI more likely to smooth depreciation than defend a fixed rate.