Today, Monday, 04.05.2026

USD/INR:

The Indian rupee is expected to inch higher at the open on Monday, supported by a pullback in oil prices after the U.S. said it would begin efforts to free ships stranded in the Strait of Hormuz, while traders watch for updates on U.S.-Iran negotiations.

The rupee USDINR is expected to open in the 94.86 to 94.88 range against the U.S. dollar, per traders. It settled at 94.91 on Thursday when it hit an all-time low of 95.33.

Indian financial markets were shut on Friday.

The Brent crude July futures contract slid to the $105.50 level in the Asia session after U.S. President Donald Trump said on Sunday the U.S. would move to help clear ships stuck in the Strait of Hormuz.

Trump offered scant details, saying the move was a humanitarian effort for neutral nations.

Meanwhile, the lack of progress toward a peace deal is expected to limit oil's downside, analysts said. Negotiations between the U.S. and Iran continued with the countries assessing responses from each other.

Brent crude was last trading near $108 a barrel.

The rupee has remained under persistent pressure in recent sessions, sliding nearly 2% over the past eight trading days.

The sustained weakness reflects a feedback loop from high oil prices, which has eroded sentiment, prompted heavier hedging by importers, and reinforced steady dollar demand from oil refiners.

High oil prices have further undermined the rupee by keeping foreign investors on the sidelines of Indian equities. Portfolio outflows reached nearly $6.5 billion in April, with cumulative withdrawals in 2026 at roughly $20.6 billion, surpassing outflows seen in all of 2025 and adding to dollar demand.

The rupee's outlook remains challenging from both sentiment and flow perspectives, with the ballooning Reserve Bank of India FX forward book an added headwind, a currency trader at a bank said.

MAJOR WORLD CURRENCIES:

USD:

The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, currently trades near 98.20 during the Asian trading hours on Monday. The DXY steadies as traders continue to assess geopolitical tensions in the Middle East. 

US President Donald Trump said the US will begin guiding some neutral ships trapped in the Persian Gulf out through the Strait of Hormuz beginning Monday. Bloomberg reported that US Navy ships will stay nearby if needed to stop the Iranian military from attacking commercial vessels in the Strait. 

An Iranian official warned that US interference in Hormuz will be considered a violation of the ceasefire, adding that the Strait of Hormuz and the Persian Gulf are not a place for rhetoric. Traders will closely monitor the developments surrounding the Middle East conflict and a continued blockade of the Strait of Hormuz. Any signs of escalating tensions could lift the US Dollar as a safe-haven currency. 

All eyes will be on the US employment report for April, which is due later on Friday. The US economy is expected to see 73K job additions in April, while the Unemployment Rate is projected to remain steady at 4.3% during the same period. If the report shows a weaker-than-expected outcome, this could drag the DXY lower in the near term. 

GBP/USD:

The GBP/USD pair gathers strength around 1.3600 during the early European session on Monday. Signals from the Bank of England (BoE) that suggest a potential shift toward higher interest rates later this year underpin the Pound Sterling (GBP) against the US Dollar (USD). The US employment report for April will be in the spotlight later on Friday. 

The UK central bank held the bank rate steady at 3.75% as widely expected, presenting a scenario framework that suggests rate hikes could be appropriate but avoiding any pre-commitment. BoE Governor Andrew Bailey warned of "forceful tightening" if energy price shocks from the Middle East conflict continue to drive inflation. 

Nonetheless, uncertainty in the Middle East and the Strait of Hormuz could support the Greenback and act as a headwind for the major pair. US President Donald Trump said the US will begin guiding some neutral ships trapped in the Persian Gulf out through the Strait of Hormuz beginning Monday. Top Iranian lawmaker Ebrahim Azizi said that any US interference in the Strait will be considered a violation of the ceasefire.

Traders brace for the US employment report for April later on Friday. The US economy is estimated to see 73K job additions in April, while the Unemployment Rate is expected to remain steady at 4.3% during the same period. Any signs of weakening in the US labor market could weigh on the USD against the GBP. 

EUR/USD:

The EUR/USD pair attracts some intraday sellers following a modest Asian session uptick to mid-1.1700s and fills a major part of a bullish gap at the start of a new week. Spot prices, however, manage to hold above the 1.1700 round figure, warranting some caution before positioning for an extension of Friday's retracement slide from a one-and-a-half week top.

From a technical perspective, the EUR/USD pair holds a modest bullish bias as it trades above the 200-period Simple Moving Average (SMA) on the 4-hour chart, suggesting dips are being absorbed for now. Meanwhile, the Relative Strength Index (RSI) is near 53 points to mildly positive but not overstretched momentum, while the Moving Average Convergence Divergence (MACD) indicator remains slightly in positive territory. This hints that upside pressure is present but not yet impulsive.

GOLD:

Gold price (XAU/USD) trades with mild losses around $4,605 during the early Asian trading hours on Monday. Traders will closely monitor the developments surrounding the ongoing geopolitical tensions. Federal Reserve (Fed) Bank of New York President John Williams is set to speak later on Monday. 

Bloomberg reported on Sunday that efforts to mediate an end to the Iran war persisted after US President Donald Trump hinted that Tehran's latest peace proposal might not be enough to satisfy him. Trump also said that the US will begin guiding some neutral ships trapped in the Persian Gulf out through the Strait of Hormuz beginning Monday. 

Meanwhile, an Iranian official warned that US interference in Hormuz will be considered a violation of the ceasefire, adding that the Strait of Hormuz and the Persian Gulf are not a place for rhetoric. 

Any signs of escalating tensions in the Middle East could have fueled inflation fears, making rate cuts less likely. This, in turn, could weigh on the yellow metal. Gold is often used amid geopolitical uncertainty but does not yield interest, making it less attractive when interest rates are high.