The Indian rupee was stuck in a narrow range after opening higher on Thursday, with the central bank likely stepping in to shore up the currency that had slipped to a near three-week low in the previous session.
Four traders Reuters spoke to cited dollar sales from state-run banks before the open as an indication of Reserve Bank of India intervention. The local currency, which opened at 94.9275 against the dollar, has since traded in a narrow 5-paisa range and was at 94.95 as of 10:55 a.m. IST. It was earlier on track to open at around 95.15, according to traders.
On Wednesday, the currency ended at 95.2475 after breaching the 94.80-95.00 zone, which traders noted as a key near-term support zone.
“It seems the RBI wanted the pair to open below 95 levels, which must have led to the usage of pre-market intervention,” a trader with a brokerage said.
On Wednesday, the RBI was seen offering dollars near 94.75, but once the central bank appeared to step back, selling pressure intensified, and a cluster of stop-loss orders was triggered as the rupee weakened past key levels.
A persistent fall in oil prices also supported the rupee, as tensions seemed to ease after the US-Iran peace deal. Qatar said Tehran and Washington had made “positive progress” in indirect talks that concluded on Wednesday.
Most Asian currencies, however, weakened on Thursday as rising US Treasury yields supported the dollar ahead of the closely watched US June non-farm payrolls report due later in the day.
The upcoming report is expected to be a key trigger for markets.
A stronger-than-expected jobs print could push Treasury yields higher, increasing pressure on the rupee and other Asian currencies.
Comments from Federal Reserve Chair Kevin Warsh reinforced the central bank’s focus on containing inflation and reinforced bets that the Fed is on its path to hike interest rates in 2026.
