The Indian rupee extended its recent gains, closing at a 10-week high of 94.48 against the US dollar. This upward momentum was primarily driven by robust foreign currency deposit inflows through the Reserve Bank of India and a weaker global dollar index.

Opening strongly at 94.30, the domestic currency touched an intraday peak of 94.27 to reach a two-month high. By the end of August, the Reserve Bank of India had successfully mobilised $136.4 billion through its specialized deposit schemes, providing solid structural support to the local currency.

Global Currency Trends and US Economic Outlook

The global dollar index weakened against a basket of six major currencies, boosting the appeal of emerging market assets. Analysts noted that softer US private employment figures, declining Treasury yields, and dovish signals from Federal Reserve officials have reduced expectations for aggressive monetary tightening.

Reflecting this broader regional trend, most Asian currencies advanced during the session, with the Japanese yen appreciating sharply over the past two sessions.

Crude Oil Prices and Future Outlook

Despite the domestic currency’s strong performance, commodity markets presented headwinds. Brent crude rose by about 2% to trade near $97 per barrel following renewed geopolitical tensions between the US and Iran, while West Texas Intermediate hovered near $92 per barrel. Because India remains a net energy importer, rising oil prices continue to pose a risk to the current account deficit and the rupee’s near-term stability.

Looking ahead, currency markets will closely monitor upcoming US macroeconomic data, particularly non-farm payrolls and employment reports. These indicators will heavily influence the path of Federal Reserve policy and dictate the subsequent direction of the US dollar.