The Indian rupee hovered around 95.2 per dollar, pausing recent losses after multi-week lows as investors assessed persistent dollar demand, Reserve Bank of India intervention, and broader weakness in Asian currencies. The local currency’s outlook weakened after it fell nearly 1% last week, pressured by arbitrage-related outflows, routine importer demand for US dollars, and a stronger greenback amid expectations that the Federal Reserve could keep interest rates higher for an extended period. Although the dollar eased following a softer-than-expected June employment report, traders expect only limited relief for the rupee. While lower crude oil prices offered support, persistent dollar demand has limited the rupee’s recovery, even as the central bank continues to smooth volatility through dollar sales. Globally, attention is on the Fed’s latest meeting minutes and the upcoming US inflation report, both of which could shape interest rate expectations and the dollar’s direction.

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