Rupee Pressure Builds Ahead of Potential Fed Rate Hike
The Indian rupee may face further pressure this week as rising oil prices and growing expectations of a US Federal Reserve rate hike weigh on its value.
Rising crude oil prices have increased pressure on India's import bill, which in turn puts downward pressure on the currency. Brent crude has climbed back towards the $90-a-barrel level, further exacerbating this trend.
Kunal Kurani, vice president at Mecklai Financial, expects 'largely rangebound trading' until the RBI relents, but notes that the rupee's broader path is towards further weakness. He believes aggressive bets on rupee weakness are being tempered by regular intervention from the Reserve Bank of India.
The rupee closed last week at 95.3775 per US dollar, a 0.2% gain over the previous week but still within a narrow range of around 30 paise that has persisted for two weeks.