Rupee hits two-month low, oil prices remain focal point

The Indian rupee hit a two-month low, touching 96.5250 per dollar before closing at 96.4450, down nearly 0.2%, with the RBI selling dollars through state-run banks to limit the decline. Brent crude prices retreated from above $90 per barrel after Iran signalled potential negotiations with the U.S., though geopolitical tensions around the Strait of Hormuz and a ninth consecutive day of U.S. strikes on Iran kept risks elevated. Markets are pricing in about 36 bps of Fed rate hikes and around 70 bps of RBI rate hikes over the next 12 months, highlighting India's vulnerability as the world's third-largest oil importer.