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Indian rupee steadies near 95.33 as RBI intervention seen
USD/INR slips toward 95.3 as crude prices and a looming US inflation print temper upside for the rupee.
The Indian rupee recovered early losses against the US dollar on Wednesday, with USD/INR trading slightly lower near 95.33, as traders cited likely Reserve Bank of India intervention through state-run banks. FXStreet said dollar sales helped limit declines but kept gains in check heading into a key US inflation release and amid worries over higher oil prices.
The report linked the rupee’s underperformance earlier in the session to surging crude, which can raise the risk of foreign outflows for oil-importing countries. It noted that MCX Crude Oil for the August 19 contract was around Rs. 7,950, close to its weekly high of Rs. 8,075 set Tuesday.
Oil price risks were tied to ongoing tensions between the United States and Iran, with the Strait of Hormuz described as a critical chokepoint for a substantial share of global energy supply. FXStreet cited data from Kpler showing shipping traffic through the strait fell to six vessels on August 10, versus about 11 on a recent 10-day average, down sharply from pre-war levels of 130 to 140 ships daily.
On the domestic macro front, the rupee’s outlook was also influenced by India’s retail CPI for July, which rose to 4.45% year over year from 4.35% in June, broadly in line with expectations. FXStreet said the data is unlikely to push the RBI toward rate hikes soon, with the central bank leaving policy rates unchanged earlier this month and cutting its inflation forecast for the current financial year to 5.0% from 5.1%.
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