Mumbai, Aug 13 – The Indian rupee recorded its sharpest rise in more than a month on Wednesday, buoyed by a softer U.S. inflation print that raised expectations of a Federal Reserve rate cut in September, dragging the dollar lower.
The local unit appreciated 0.31%, ending the session at 87.44 per dollar, compared to 87.71 in the previous close. This marked the rupee’s biggest single-day advance since July 3.
Data released in the U.S. showed that consumer prices edged up only modestly in July, with recent tariff measures having limited impact. The reading boosted emerging market currencies, including the rupee, as traders increased their bets on Fed easing. Rate-cut probabilities for September are now pegged at 94%, with markets factoring in 60 basis points of cuts for the year.
Adding to the pressure on the greenback, the White House confirmed that President Donald Trump was considering legal action against Fed Chair Jerome Powell over alleged mismanagement of renovations at the central bank’s headquarters. The dollar index slipped 0.4% to 97.65 by mid-afternoon.
Analysts expect the rupee to hold a positive bias in the near term. “For USD/INR, the outlook is bearish over the next couple of sessions,” said Jigar Trivedi, senior currency and commodity analyst at Reliance Securities.
However, uncertainty around U.S. trade tariffs continues to weigh on investor sentiment. Attention is now on the Trump–Putin summit in Alaska scheduled for Friday, where discussions on the Ukraine war could influence Washington’s tariff stance on Indian goods, particularly in light of New Delhi’s continued purchases of Russian crude.
Meanwhile, regional peers also strengthened, with the Indonesian rupiah and Malaysian ringgit gaining 0.6% and 0.5%, respectively, while the South Korean won rose 0.5%.
