The Rupee opened weaker as the currency's direction this week is likely to revert to being driven by oil prices and equity flows, with support from central bank rule-linked flows now having faded, ?while bonds will be driven by oil and the Reserve Bank of India's actions. The rupee rose 0.4% last ?week to 92.7275 per U.S. dollar, building on a nearly 2% rally the previous week, when banks were forced to unwind arbitrage trades to comply with an RBI directive capping the size of their onshore FX positions. The unwinding involved banks selling dollars in the onshore ?market, which in turn lifted the rupee. Banks were required to comply with the directive by ?last Friday, meaning the support the rupee drew over the past two weeks is now ?expected to wane. The rupee is now back to a phase where fundamentals will reassert themselves, with direction ?likely to be driven by oil prices, capital flows and underlying demand-supply dynamics, said Kunal Sodhani, head treasury ?at Shinhan Bank India. On oil, the news flow at the start of the week was negative for the rupee. Oil prices jumped on the day after the U.S. Navy moved to prevent ships from accessing Iran via the Strait of Hormuz, raising ?the risk of curbs on Iranian oil exports after Washington and Tehran failed to reach a deal to ?halt the war. The benchmark 10-year yield ?dropped ?22 basis points last week to end at 6.9119% on Friday, after rising a cumulative 39 bps in the previous two weeks. The decline marked the benchmark's biggest weekly fall since October 2019 last week, as yields tracked moves in oil prices and the RBI's monetary policy decision and guidance was "neutral", countering fears of a hawkish tilt. Traders see the yield moving in a 6.85%-7.00% range this week. Brent crude tumbled ?around 12% last week to about $95 ?per barrel, as a two-week ?ceasefire between the U.S. and Iran raised hopes of a resumption of oil supplies through the Strait of Hormuz. However, the drop was short-lived, with Brent creeping higher as fighting continued in the Middle East, casting ?doubt on the truce. The safe-haven dollar advanced broadly in early Asian trade on Monday, as ?peace talks between the U.S. and Iran broke down and the U.S. Navy ?prepared a blockade of Iranian ports. The euro was down 0.3% at $1.1684, while the British pound fell 0.5% to $1.3398. The risk-sensitive Australian dollar was 0.6% lower at $0.7030, and the New Zealand dollar was off 0.4% at $0.5816. The ?currency rallied as much as 1.8% to 314.89 against the dollar, its strongest level since January, and jumped 2.2% against the euro to its firmest in four years. The U.S. dollar index , which measures the greenback's strength against a basket of six currencies, held steady at 99.056, near its highest level since April 7. Against the ?yen , ?the U.S. dollar was up 0.4% at 159.83 yen ?as yields on Japan's benchmark 10-year government bonds jumped 5.5 basis points to 2.49%, the highest level in ?almost three decades. Oil prices jumped above $100 a barrel on Monday as the U.S. Navy prepared to block ships ?from reaching Iran via the Strait of Hormuz, a move that could restrict Iranian oil exports, after Washington and Tehran failed to reach a deal to end the war. Brent crude futures rose $6.71, or 7.05%, to $101.91 a barrel by 0104 GMT after settling 0.75% lower on Friday.......