The Indian rupee weakened on Friday, edging close to its record low as oil stayed above $100 a barrel and US bond yields climbed. It fell 0.2% to 95.94, near the 95.9575 record hit the prior session, but state-run banks’ dollar sales helped prevent a deeper slide. Brent rose above $107 after fresh Iran-related uncertainty. India also raised petrol and diesel prices by more than 3% for the first time in four years, while markets priced about 90 bps of potential hikes, alongside expectations of Fed tightening.
The U.S. dollar climbed to a two-month high, on track for its largest weekly gain in more than two months. Fueling the move were rising energy prices and shipping disruptions that are stoking inflation fears, alongside firmer growth signals such as retail sales and stable jobless claims. Those factors have pushed markets to price a December Fed rate hike more aggressively. Meanwhile, the U.S.-China summit delivered cautious signals, with attention on Strait of Hormuz reopening and possible Chinese interest in U.S. oil.
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