The Indian rupee is expected to slip past 86 to the U.S. dollar at the open on Friday, hit by surging oil prices and sliding risk assets after Israel attacked targets in Iran.

President Donald Trump has repeatedly demanded the Federal Reserve slash interest rates. But Fed officials have stood pat, waiting to see how his administration’s sweeping policy changes affect the economy first.

Oil prices leaped, and stocks slumped on worries that escalating violence following Israel’s attack on Iranian nuclear and military targets could damage the flow of crude around the world, along with the global economy.

U.S. ultra-low sulfur diesel futures hit the highest level since February, outpacing gains in oil and gasoline as analysts warned that diesel supply is the most exposed to the conflict in the Middle East.

Entering the meeting, markets are pricing two interest rate cuts from the Fed in 2025, in line with the central bank's median dot plot projection from March. But since then, there have been significant changes to tariff policy, which will put any updates to the Fed's outlook in particular focus.

After a night of intense cross-border attacks, Iran has threatened any country that attempts to defend Israel | ITV National News

The US ordered some staff to leave its embassy in Baghdad, and restricted government employees and family members in Israel from traveling outside major cities like Tel Aviv. Around the same time, risk warnings from naval forces were issued to vessels operating in and around the Persian Gulf,

U.S. investors on Friday sought refuge in safe-haven assets like the dollar and gold, as oil prices surged after Iran retaliated against Israel's biggest-ever military strike against the major crude producer.