Indian Rupee Gains as Oil Prices Ease and Fed Rate Hike Odds Recede
The Indian rupee started the day on a stronger footing against the US dollar on October 5, opening at 96.22 per dollar, up 10 paise from the previous close of 96.32. This rise was attributed to easing oil prices and reduced expectations of a Federal Reserve rate hike in October, which lessened pressure on the currency.
According to Finrex, the rupee was expected to open at 96.16, supported by a slight drop in oil prices to 101.40. However, the dollar index remained higher at 102.12, influenced by the euro's decline to 1.1212. Despite this, dollar buying by oil companies is anticipated to continue, while foreign portfolio investors (FPIs) are likely to maintain their sell mode.
Market participants are keeping an eye on the Reserve Bank of India's (RBI) actions, with some anticipating a 25 basis points rate hike on September 7, as the Monetary Policy Committee (MPC) meeting begins today in Mumbai. Analysts suggest buying dips towards the 96.00 level, with a near-term target of 96.50.
Across Asia, most currencies strengthened against the US dollar, led by the Indonesian rupiah, which gained 0.47%. The Taiwan dollar and Philippine peso also saw gains, along with a modest rise in the Japanese yen. In contrast, the Singapore dollar, South Korean won, and Malaysian ringgit weakened against the greenback.