FX.co ★ Rupee Hits Two-Month High

The Indian rupee strengthened to about 94.4 per US dollar, marking its highest level in more than two months, supported by persistent intervention from the Reserve Bank of India (RBI) and expectations of continued dollar selling. The currency advanced 0.9% over the past week, with the RBI’s sustained presence in the market helping shield it from adverse global sentiment.

According to traders, the central bank’s capacity to intervene has been bolstered by its expanded foreign exchange reserves, which have been augmented by a rise in foreign-currency inflows. This has enhanced the RBI’s ability to support the rupee and curb excessive volatility.

At the same time, Brent crude jumped 7.8% last week to a six-week high of around $97 per barrel. The move followed heightened US–Iran tensions that stoked fears of prolonged supply disruptions, while stronger-than-expected US employment data increased the probability of a Federal Reserve interest rate hike at its September 15–16 meeting.

Market focus now shifts to the US inflation report for August, due on Friday, which could shape expectations for the Fed’s upcoming policy decision.