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Rupee firms as USD/INR slips to lowest level in 3 weeks
The move is linked to lower oil prices after renewed US Iran de escalation hopes, alongside growing confidence of a September Fed hike.
The Indian rupee strengthened against the US dollar at the start of the week, with USD/INR down 0.25% to around 95.15, the lowest level in over three weeks, according to FXStreet.
FXStreet said the currency’s gain is tied to sharply lower oil prices following a weekend announcement that planned US attacks on Iran have been suspended after Iran agreed to a nuclear deal and the reopening of the Strait of Hormuz. With India relying heavily on oil imports, the outlet said the rupee tends to underperform when oil prices are elevated.
The story also pointed to support from risk sentiment, noting renewed US Iran peace hopes appeared to give a lift to Indian equities, with the Nifty50 up 0.7% near 24,555 at the time of writing.
On the US side, FXStreet reported the US Dollar Index, or DXY, was trading about 0.1% lower near 99.70 and said traders are confident the Federal Reserve will hike rates at its September meeting, with CME FedWatch placing the odds at 67.7%. Investors are also set to watch US Nonfarm Payrolls for July and the ISM Manufacturing PMI, while domestically the RBI’s monetary policy decision arrives Wednesday.
Latest closeDollar index 99.80 ▼0.2%