Indian Rupee advances on Fed cut hopes; ends 16 paise higher at 88.28/$

Indian rupee today: The domestic currency closed 16 paise higher at 88.28 against the greenback on Friday

The Indian Rupee posted gains on Friday amid expectations of a Federal Reserve rate cut in the upcoming September meeting.

 

The domestic currency closed 16 paise higher at 88.28 against the greenback on Friday, according to Bloomberg. So far this year, the rupee has depreciated 3.19 per cent, making it the worst performer among Asian peers.

 

Rupee traded positively as mixed inflows from foreign portfolio investors (FPIs) supported sentiment, according to Jateen Trivedi, VP research analyst - commodity and currency, LKP Securities. The dollar index remained weak below 98, providing additional strength to the rupee, while ongoing trade deal talks with the US also added optimism, he said. 

 

   

"Overall, rupee looks set to gain some lost ground with scope to test 87.75 in the coming days, while 88.50 is seen as a reversal resistance zone," Trivedi said. 

 

Despite the recent pressure, analysts at YES Securities see limited downside in the domestic currency from current levels. "Indian rupee's slide past the 88-mark largely reflects US tariff-driven sentiment rather than a deterioration in India’s underlying fundamentals, suggesting limited room for further depreciation," the brokerage said.  

 

The dollar index traded higher amid increased expectations of a Federal Reserve rate cut this month after the consumer inflation print. The core consumer price index increased 0.3 per cent from July, while the overall CPI rose 0.4 per cent, the most since the start of the year. The dollar index, a measure of the greenback against a basket of six major currencies, was up 0.20 per cent at 97.73. 

 

Investors await industrial production data from Japan and the UK; GDP and trade data from the UK; and consumer sentiment data from the University of Michigan in the US. Back home, investors await inflation numbers for August and foreign exchange reserve figures.

 

In commodities, crude oil prices were trading higher amid concerns over softening US demand and global oversupply outweighed support from recent geopolitical tensions. Brent crude price was up 0.54 per cent at 66.73 per barrel, while WTI crude prices were higher by 0.38 per cent at 62.61 per barrel, as of 3:38 PM IST.