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Rupee strengthens as USD/INR slides to over two-week lows
USD/INR fell toward 95.30 as doubts over the Fed’s inflation-fighting stance weighed on the dollar ahead of the RBI meeting on Aug. 5.
The Indian rupee extended a week-long rally against the US dollar, pushing USD/INR down to a fresh over two-week low near 95.30, FXStreet reports. The move followed an overnight slide in the dollar amid growing questions about whether the Federal Reserve is committed to bringing US inflation down.
FXStreet said the US Dollar Index, which tracks the greenback versus six major currencies, was near 100.00 after falling almost 0.9% on Thursday to around 99.86. It also pointed to Fed Chair Kevin Warsh reiterating a focus on price stability but declining to offer forward guidance on interest rates, while saying the central bank would make necessary monetary policy adjustments to combat hot inflation.
The outlet also cited higher oil prices, saying concerns about prolonged energy supply constraints linked to US and Iran tensions could cap upside for the rupee. With India a large oil importer, FXStreet noted that currencies in energy-import dependent economies tend to underperform when oil is elevated.
Looking ahead, FXStreet said the major near-term catalyst for the rupee is the Reserve Bank of India’s monetary policy announcement on August 5. Commerzbank expects the RBI to keep its benchmark repurchase rate unchanged at 5.25% at its next meeting on Aug. 5, according to the report.
Latest closeDollar index 99.80 ▼0.2%