Rupee Weakens as US Jobs Data Boosts Dollar Strength
The Indian rupee is expected to open weaker at the start of the week following a stronger-than-expected US jobs report for June. The data has provided rare positive momentum for the dollar, pushing US treasury yields higher and pressuring emerging market currencies. The rupee, which last closed at ₹85.31 against the dollar, is forecast to open between ₹85.46 and ₹85.50, according to early offshore indicators.
Dollar Gains on Solid US Labor Market
The US labor report for June surprised analysts with better-than-expected non-farm payroll figures and a drop in the unemployment rate. These signs of resilience in the world’s largest economy have delayed expectations of a US Federal Reserve rate cut, which had previously weakened the greenback. As a result, the dollar has surged, with ripple effects across currency markets.
Rupee Faces Headwinds From Dollar Rally
With the dollar index strengthening and US yields rising, the rupee is entering the week on the back foot. Currency dealers see ₹85.30–85.50 as a near-term support zone for USD/INR, with some warning that a breach above ₹85.50 could trigger more losses for the rupee. The trend is further exacerbated by trade-related dollar demand from importers, especially oil firms, which typically intensifies at the start of a new month.
Watch for Volatility Amid Global Trade Talks
Market participants expect the rupee to trade in a wide range of ₹85.20 to ₹85.80 in the coming days, depending on flows, central bank interventions, and developments in global trade talks—particularly the interim India-US trade pact under discussion. With geopolitical tensions and inflation data also in focus, volatility remains a key risk.
Weekly Currency Outlook
| Indicator | Impact on Rupee |
|---|---|
| US jobs report | Bearish |
| Treasury yield spike | Bearish |
| Fed rate cut delay | Bearish |
| Oil import dollar demand | Bearish |
| Expected INR range | ₹85.20–₹85.80 |
As the dollar reasserts its dominance, the rupee faces an uphill task in maintaining stability unless supported by strong domestic cues or central bank action. Traders remain cautious, with many watching the ₹85.50 resistance closely for signs of further depreciation.
