The Indian rupee is set for a volatile session as it confronts a confluence of macroeconomic headwinds and geopolitical risks.
Traders returning from a long weekend face immediate pressure from higher US Treasury yields, which have dampened global risk appetite and weakened Asian currencies broadly.
The rupee is expected to open under strain, weighed down by the strengthening dollar and the broader sell-off in emerging-market assets.
The Reserve Bank of India (RBI) may need to intervene to stabilize the currency, as the central bank's defense line comes under renewed threat from external market forces.
This pressure coincides with escalating tensions in the Middle East, which have further exacerbated uncertainty in global markets.
The combination of geopolitical risk and shifting US monetary policy expectations has created a challenging environment for emerging-market currencies, with the Malaysian ringgit and other regional peers also facing downward pressure.