Indian rupee ongoing rally backed by ebbing Fed hike odds, soft oil

MUMBAI: The Indian rupee may nudge higher at Thursday’s open, supported by the broad dollar weakness on diminishing odds of ​a Federal Reserve rate hike next month and Brent crude ‌largely holding on to its recent decline. The Indian rupee is expected to open in the 95. 04-95. 08 range, according to traders, after settling at 95. 1175 per U. S. dollar on ​Wednesday. The currency on Wednesday climbed past the 95-per-dollar level for ​the first time in a month, before running into demand ⁠for dollars from companies and intraday speculative players. Volatility in oil prices ​added another layer of pressure on the rupee, which has now recovered ​about 1. 7% from its recent lows. The rupee briefly weakened to nearly 95. 25 during Wednesday’s session before recovering. Wednesday was the kind of session that “was largely supportive of the rupee ​and kept the underlying bias positive, ” said a currency trader at ​a bank. “The rupee was always going to face resistance past the 95 level. The ‌fact ⁠that it encountered resistance there and the damage was limited underscores the underlying positive trend, ” the trader added. Dollar’s struggles Asian currencies inched higher against the dollar on Thursday, while the dollar index dipped to 99. 64. Diminishing odds ​of a Fed ​rate hike next ⁠month, along with optimism surrounding a potential U. S. -Iran deal, weighed on the dollar. Oil prices fell on Thursday with ​investors assessing whether progress in Iran-Oman talks could ​pave the ⁠way for a U. S. -Iran peace agreement. Brent crude futures dropped to $79. 04, before inching higher to $79. 68. Lower oil prices and soft U. S. private employment data prompted traders to ⁠scale back ​expectations of a Fed rate increase in ​September. The implied probability of a September hike stood at 55%, down from nearly 70% at ​the start of the week.

Read full story on Business Recorder