Rupee loses ground as hawkish Fed and oil prices rise
In short
The Indian rupee fell after rising for several sessions. The move came as the US Federal Reserve sounded hawkish and oil prices went up.
The currency also faced pressure from a wider merchandise trade deficit. Foreign investment helped a bit, but not enough to lift the rupee much.
What the reporting says
The Indian rupee weakened after a recent rising streak as hawkish US Federal Reserve signals and higher oil prices weighed on the currency. Economic Times Forex said foreign inflows gave some support, but not enough to spark a strong rebound. It also said India’s merchandise trade deficit hit a yearly peak, adding to pressure on the rupee. The RBI is expected to step in when the rupee strengthens.
Why it matters
The rupee moved lower as higher oil prices and a hawkish Federal Reserve backdrop pressured the currency market. Economic Times Forex also cited foreign investment inflows as partial support and said India’s merchandise trade deficit hit a yearly high. The report added that the RBI is expected to buy dollars when the rupee strengthens, which can affect forex reserves and trading flows.