Rupee Strengthens as Oil Prices Ease and Fed Rate Hike Expectations Dim

The Indian rupee began the week on a stronger note, opening at 96.22 per dollar on October 5, 2026. This marked an improvement of 10 paise from the previous day's close of 96.32. The uptick was attributed to softer oil prices and a reduction in expectations of a Federal Reserve rate hike this month, following weaker-than-expected US jobs data.

According to Finrex, the rupee was expected to open at 96.16 as oil prices dipped slightly to $101.40. The dollar index also saw an increase to 102.12, while the euro fell to 1.1212. Despite the positive opening, analysts noted that dollar buying by oil companies and foreign portfolio investor (FPI) sell-offs would continue, putting pressure on the rupee.

Market participants are anticipating a 25 basis points rate hike by the Reserve Bank of India (RBI) during its Monetary Policy Committee (MPC) meeting starting on October 7 in Mumbai. The rupee is expected to test 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, while the Japanese yen rose 0.095%. However, the Singapore dollar, South Korean won, and Malaysian ringgit weakened against the greenback.