The Indian Rupee gains ground in Monday’s early European session.
Fed rate cut hopes and lower crude oil prices support the INR.
The renewed US Dollar (USD) demand might limit Indian Rupee’s gains.
The Indian Rupee (INR) strengthens on Monday. The expectation that the US Federal Reserve (Fed) might cut the interest rate in September has lifted the INR. Lower US interest rates could boost capital flows into higher-yielding emerging market assets, benefiting the Indian Rupee. Additionally, the decline of crude oil prices from a four-week high supports the local currency and helps to alleviate the INR’s depreciation, as India is the world's third-biggest oil importer and consumer.
Nonetheless, the renewed US Dollar (USD) demand amid the cautious mood might undermine the INR. Looking ahead, investors await the Fed's Chair, Jerome Powell, who will testify on Tuesday. The attention will shift to the US Consumer Price Index (CPI) inflation data for June, which is due on Thursday.
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