The Indian rupee weakened to around 95.25 per dollar, pulling back from four-week highs as a rebound in global oil prices rekindled concerns about India’s import bill and inflation outlook. Brent crude rose back above $83 a barrel, extending gains for a third consecutive session after climbing about 4% on Thursday. The advance followed a proposal by Iran and Oman to restrict vessels deemed hostile, heightening fears of potential supply disruptions.
Market sentiment was also cautious ahead of the US July nonfarm payrolls report, with economists forecasting an increase of 80,000 jobs after a 57,000 gain in June and an unchanged unemployment rate of 4.2%. The data could shape expectations for additional Federal Reserve interest rate hikes.
At the same time, traders closely watched the Reserve Bank of India. Recent RBI dollar sales had helped push the rupee to a one-month high, but persistent underlying demand for dollars indicated that the currency’s near-term trajectory would remain heavily influenced by the scale of RBI intervention.
