Indian Rupee Poised for Mild Relief Amid Softer Oil and Fed Hike Doubts
The Indian rupee is poised for a mild rebound on Monday, supported by softer oil prices and reduced expectations of an October Federal Reserve rate hike. Traders anticipate the rupee to open in the range of 96.22-96.26 per dollar, after closing at 96.3150 on Thursday. The currency has faced persistent pressure, falling to a two-month low amid rising US Treasury yields and high oil prices.
The Reserve Bank of India (RBI) has been actively intervening to slow the rupee's decline, but the breach of the 96-per-dollar level has increased the likelihood of further weakness. Traders suggest that any relief in the rupee's opening is partly due to expectations of RBI intervention.
The probability of a Fed rate hike this month has dropped to around 20%, following weaker-than-expected US job data. However, investors remain cautious about inflation risks, which could limit the rupee's gains. Oil prices also eased on Monday due to increased Middle East exports and supply releases by G7 nations.
While the rupee may see some short-term respite, traders warn that the relief could be temporary given the broader economic uncertainties.