Rupee Reverses Morning Gains, Ends Lower Against Dollar

The Indian Rupee closed weaker against the US Dollar on Monday, reversing early gains amid cautious global sentiment and persistent foreign portfolio outflows. The currency settled at 86.67 per dollar, down 16 paise from Friday’s close of 86.51.

The rupee had opened the session on a stronger note at 86.47, supported by easing trade tensions and a softer dollar index. However, the initial momentum faded as the day progressed, weighed down by concerns over upcoming global economic data.

Market participants are closely watching the US Federal Reserve’s two-day policy meeting starting Tuesday, along with key indicators such as the June PCE inflation index, advance GDP figures, and the July jobs report. These data points are expected to influence currency flows and investor sentiment globally.

Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP, noted that the rupee’s volatility is being shaped by expectations around a potential US-India trade agreement and the August 1 tariff deadline. He added that month-end demand and inflows into Indian government bonds could offer some support.

“The market remains cautious due to upcoming global events and continued portfolio outflows, which are keeping the dollar well bid,” Bhansali said.

Brent crude prices also edged higher to $67.86 per barrel in Asian trading during early trade but gave up some gains to trade at $67.15 at market close, adding to the rupee’s pressure amid concerns over rising import costs.