The Indian rupee closed little changed against the US dollar on Monday amid expectations of continued intervention from the Reserve Bank of India.
The rupee closed flat at 83.95 against the US dollar after opening at Rs 83.96 against the US dollar, according to Bloomberg data. The domestic currency had closed at Rs 83.95 on Friday.
Even though the dollar index has depreciated by over 5% in the past six months and oil prices have dropped nearly 20% in two months, the rupee appears set to trade within its established range, according to Amit Pabari, managing director of CR Forex Advisors. "This stability is largely due to the RBI's active intervention, which has kept the rupee in a tight range."
Market participants' focus will now be on key data releases this week in the US, including inflation and PPI figures, which will further clarify the Fed's path forward, Pabari said. "If global equities come under pressure, the pair may break Rs 84 and head towards Rs 84.10–84.20. A trend reversal is likely only if the rupee breaks Rs 83.80."
The US dollar index was 0.34% higher at 101.52 as of 3:36 p.m. Brent crude was trading 0.97% higher at $71.75 per barrel at 3:37 p.m.
Latest labour economic data from the US has raised uncertainty over the likelihood of an aggressive Fed rate cut in September, according to Anil Bhansali, executive director at Finrex Treasury Advisors LLP.
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