The Indian Rupee lost its initial gains today as the currency ended at 87.27 against the US dollar before the Jackson Hole symposium, in which the US Fed Chairman Jerome Powell is expected to say something contentious that would influence general market expectations. The local currency declined by 20 paise as per figures, and dropped to 68.55 in the last phase of trading.
The Rupee has been struggling under a steady weakness as it is already down 1.8% in the current financial year and 1.93% in 2025 so far. But in August alone, it had a reasonable rise of around 0.5 per cent against the dollar. The prevalence in the performance highlights the instability witnessed by the currency as investors consider domestic fundamentals against cues pertaining to global monetary policy.
On the policy front, the Reserve Bank of India (RBI) announced no change in the Repo rate and a continuation of the neutral stance in its Monetary Policy Committee (MPC) minutes. Explaining the downward pressure on growth is the presence of uncertainty in external demand, which is a result of tensions over tariffs and geopolitical risks impeding the growth in private investment. He has pointed out that investment intentions have not started demonstrating any meaningful strength.
In the meantime, the US Dollar Index, which monitors the health of the greenback against six global currencies, marginally moved upwards by 0.01 per cent to 98.22, creating additional heat on the Rupee.
Within the commodities space, oil prices sought an advance on Friday, as investor attention turned towards ongoing diplomatic efforts on the Ukraine peace push, as well as a steeper-than-anticipated drop in US crude stockpiles. Brent crude gained 0.93 per cent to $67.46 per barrel by 3.40 PM IST, whereas WTI crude was up 1 per cent at $63.34 per barrel.
Much of the future direction of the Rupee is expected to depend on the address by Powell at Jackson Hole, which could send new cues about the direction of Fed policy, and attract international capital flows.
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