Rupee slips to 88.75/$ even as dollar softens on easing US-China tensions

Indian Rupee today: The domestic currency opened six paise lower at 88.75 against the greenback on Monday

The Indian Rupee weakened on Monday amid an uptick in crude oil prices, while the dollar softened after US-China tensions eased. 

 

The domestic currency opened six paise lower at 88.75 against the greenback on Monday, according to Bloomberg. The currency has fallen 3.67 per cent so far this year, while it also closed at a low of 88.79 last week.

 

The Rupee, which touched a high of 88.50 last week before closing at 88.6850, is expected to open slightly lower at 88.75, with the central bank likely to curb depreciation toward 88.80, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said.

   

Market sentiment is influenced by US dollar strength amid a modest risk-off tone globally, alongside domestic factors such as the Reserve Bank of India's (RBI) stable policy stance and a controlled inflation outlook, Bhansali said. While dollar-rupee remains stable within a narrow band, supporting steady hedging and portfolio adjustments, short-term fluctuations are still sensitive to geopolitical developments, requiring careful monitoring, he said. 

 

In a move to ease tensions with China, US President Donald Trump on Sunday said Chinese President Xi Jinping is respected, adding that Washington wants to help Beijing.

 

In a post on Truth Social, Trump wrote, “Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!” Trump's remark came days after tensions between the two countries escalated, risking upending the truce. 

 

The US dollar index traded lower on a softer US-China trade stance. The measure of the greenback against a basket of six major currencies was down 0.05 per cent at 98.93.

 

Key events this week include China’s key economic data and India’s CPI inflation data on October 13. On October 14, India will release WPI inflation data, and US Federal Reserve Chair Jerome Powell is scheduled to speak. The week concludes with the RBI MPC minutes being released on October 15.

 

In commodities, crude oil, which had fallen to a five-month low last week, rose slightly on Monday. Brent crude price was up 1.64 per cent at 63.76 per barrel, while WTI crude prices were higher by 1.70 per cent at 59.90 per barrel, as of 9:05 AM IST.