Indian Rupee Surges Against USD Amid Doubts Over Fed Rate Hikes

The Indian Rupee has reached a fresh two-week high against the US Dollar on Friday, as investors continue to doubt whether the Federal Reserve will hike interest rates to combat inflation.

According to analysts at ING, the market's reaction to the Fed's press conference suggests that the central bank is not committed to fighting inflation as initially thought. Fed Chair Kevin Warsh maintained a rhetoric stance and refused to provide forward-guidance on interest rates, but said the central bank will make necessary monetary policy adjustments to combat hot inflation.

The Reserve Bank of India (RBI) is expected to keep its policy rates steady next week, with analysts at Commerzbank noting that the RBI is likely to leave the benchmark repurchase rate unchanged at 5.25% on August 5.