The currency declined 0.7% on the month and 1.2% in the July-September quarter, averting steeper losses largely on the back of persistent interventions by the Reserve Bank of India. On Wednesday, it closed at 95.83 per dollar, up from 95.98 in the previous session.

The South Asian unit navigated a tumultuous quarter, which saw benchmark Brent oil prices swing between $70 per barrel and nearly $110 as conflict between the US and Iran ebbed and flowed.

“While higher oil prices may continue to weigh on the current account, we expect healthier capital flow dynamics and the RBI’s broad policy toolkit, including the potential to raise rates if necessary, to keep the rupee range bound,” analysts at Goldman Sachs said in a note.

The Reserve Bank of India’s monetary policy decision next week is expected to be a key driver, with markets widely anticipating a 25 basis point hike.

The seven-month-old war in the Middle East has also stoked inflation concerns globally, which, alongside worries over developed market government finances, lifted bond yields to multi-year highs, hurting emerging market assets.

The yield on 10-year and 30-year US Treasuries climbed 80 bps and 65 bps, respectively, over the quarter, while Indian bonds fared better, with the yield up only 40 bps locally.

Equities, meanwhile, remained regional underperformers as foreign investors continued to give a cold shoulder to a market without clear AI opportunities. India’s benchmark stock index declined 5% compared to a roughly 1% gain for MSCI’s gauge of regional stocks.

Much of the recent pressure on the rupee has been absorbed by persistent dollar sales by the RBI that helped the currency avert a test of its record low of 96.96 hit in the previous quarter.

Measures to strengthen India’s balance of payments rolled out in June have collectively drawn inflows of $143 billion up to September 18, per central bank data, bolstering firepower to support the currency.

At 0716 GMT the rand traded at 16.3575 ​against the dollar , up roughly 0.3% from its ​previous close.

Data from the South African Reserve ⁠Bank showed M3 money supply growth accelerated to ​8.89% in August from 8.57% in July. Private ​sector credit growth rose to 7.47% from 7.41% in July, exceeding the 6.90% forecast in a Reuters poll.

Later on Wednesday, ​the National Treasury, Statistics South Africa and ​the South African Revenue Service are due to release budget ‌balance, ⁠producer inflation and trade balance figures respectively.

On the Johannesburg Stock Exchange, the Top-40 index was flat in early trade.

South Africa’s benchmark 2035 government bond strengthened, ​as the ​yield fell ⁠7 basis points to 8.765%.

In common with other risk-sensitive currencies, the rand often ​takes cues from global drivers such ​as US ⁠economic indicators and monetary policy.

The greenback softened against a basket of currencies as investors awaited US ⁠inflation ​data for clues on the Federal ​Reserve’s next policy move.

The US personal consumption expenditures price ​index is due at 1230 GMT.

The Chinese currency has been on an upward trend since late 2023, underpinned by strong exports, foreign exchange settlement flows and broad dollar weakness.

The spot yuan opened at 6.7050 per dollar and was last trading at 6.7047 as of 0221 GMT, 18 pips firmer than the previous late session close.

“FX settlement has been the direct driver of the yuan’s appreciation this year,” analysts at ICBC International said in a note.

“Whether hedged or not, holding dollars has offered no relative advantage this year, so retained foreign exchange has increasingly been converted into yuan.”

The yuan is up 0.2% against the dollar this month, and 4.3% firmer this year.

Market participants said exporters ramped up conversion of their dollar holdings into the local currency ahead of the week-long National Day holiday which begins on Thursday. Trading of onshore yuan will resume on October 8.

Prior to the market opening, the People’s Bank of China set the midpoint rate at 6.7351 per dollar, its strongest since February 2, 2023, and 326 pips weaker than a Reuters’ estimate. The spot yuan is allowed to trade in a 2% band either side of the fixed midpoint each day.

Sentiment was also buoyed by data showing China’s factory activity returned to growth in September, as easing weather disruptions allowed factories to resume operations and a global artificial intelligence boom supported the industrial sector.

Investors were also weighing measures China unveiled on Tuesday designed to steer cheaper credit into a range of sectors including infrastructure and technology, as well as expanding support for home buyers.

“The key question that remains unanswered is whether today’s measures are merely the starters, with more meaningful main dishes still on the way,” UBS economists said in a note.

The offshore yuan traded at 6.7055 yuan per dollar, up about 0.03% in Asian trade.

At 0221 GMT, the baht was 0.1% higher at 33.52 versus the dollar, after trading in a range of 33.520 to 33.600.

It ended the previous session at 33.55 per dollar, as per LSEG data.

The miss was marginal but gave speculators an excuse to keep selling the currency after three straight weeks of falls.

The Aussie eased 0.3% to $0.6963, bringing its losses this month to 2.8%.

The next support levels are $0.6922 and $0.6866. Data showed the consumer price index rose 0.4% in August, under forecasts of 0.5% as drops in clothing and travel helped offset surging fuel costs.

The annual pace still accelerated to 4.0%, with prices up broadly.

The trimmed mean measure of core inflation rose 0.2% in August, again under forecasts of 0.3%, but the annual pace held at 3.6% for a third straight month.

That remains far above the Reserve Bank of Australia’s target band of 2% to 3% and was a major reason it lifted rates to a 15-year high of 4.60% on Tuesday.

Markets had been wagering on a hotter inflation result, so the miss was enough to see the chance of another hike in November drop to 20%, from 36% before the data.

“The RBA is likely to remain in wait-and-see mode in the near term, as it looks for confirmation that disinflation will in fact take hold over the coming months,” said Abhijit Surya, a senior APAC economist at Capital Economics.

“At the margin, however, today’s relatively benign CPI data support our view that the cash rate has already peaked.”

The data were a relief for badly beaten bond markets, and 3-year debt futures bounced 8 ticks to 95.100.

Yields on 10-year debt fell 5 basis points to 5.329% and away from 15-year peaks.

The kiwi dollar held at $0.5640, after losing 0.5% on Tuesday to touch its lowest point this year at $0.56265.

Support now lies around $0.5580 and $0.5512.

It has been an especially tough month for the kiwi as it shed 4.7%, partly because the Reserve Bank of New Zealand had undershot the market’s very hawkish pricing for rates.

Perhaps reacting to that slide, the central bank has since sounded more concerned about inflation, leading markets to price in a 70% chance of another hike in October.

The Indian rupee is expected to open at 95.94-95.99 per dollar, according to traders after closing Tuesday at 95.98. It fell to a two-month ​low of 96.1475 before recovering amid likely Reserve Bank of ​India intervention.

Over the past few weeks, the rupee has repeatedly ⁠needed RBI intervention to moderate its decline, with high oil ​prices, rising US Treasury yields, weak portfolio flows and increased hedging demand ​weighing on it.

The RBI has been managing the rupee, using its increased FX reserves firepower to prevent external pressures from translating into excess pressure on the currency.

The ​RBI’s resolve to keep the rupee anchored around the 96-per-dollar mark ​is increasingly evident, putting a floor under the currency while pressure mounts, said ‌Amit ⁠Pabari, managing director at FX advisory firm CR Forex.

A dovish repricing in expectations for another Federal Reserve rate hike next month relieves pressure on the RBI to an extent.

The odds have fallen to 44% from ​nearly 70% amid ​softer US activity ⁠data and more cautious signals from policymakers about the need for an immediate follow-up move.

US consumer confidence ​fell to its lowest level in more than 12 ​years ⁠in September, while New York Fed President John Williams said there was “no need for urgency” after the September rate increase.

Williams noted that the central ⁠bank ​has time to assess incoming data before ​deciding on its next move.

Meanwhile, oil prices dropped about 2.5% on Tuesday amid signs that ​Middle East exports were recovering.

Overnight, the euro dipped to its lowest since May 2025, at $1.1312, and traded nearby at $1.1339 in Asia. The euro is also testing support around 178 yen.

Through September the dollar is up nearly 2.5% on the euro, and the rising greenback also pushed its Australian counterpart below 70 cents for the first time since ​early August.

“The US economy is running hot, Europe is losing the global AI race, and energy supplies and French politics remain ​big concerns for the euro,” said Brent Donnelly, president of foreign exchange trading at analytics firm Spectra Markets.

Earlier ⁠this month benchmark European gas prices spiked to their highest since 2022.

French markets are under pressure from debt and political gridlock, ahead of ​next year’s presidential election, and the spread with German yields has blown beyond 115 basis points to its widest since 2012.

The skew in ​options prices has tipped sharply in recent sessions to favour buying protection against further euro falls — though Donnelly says the dollar probably needs strong US data to make further headway from here.

The dollar also made a 16-1/2-month top on the Swiss franc overnight at 0.8358 francs. The franc has suffered, in part, because investors have ​gone looking for low-yielding alternatives to yen to sell in search of carry elsewhere.

The yen has fallen out of favour as a short against ​the dollar following US-Japan yen buying in July and August, which has been followed by warnings not to test their resolve, as well as a pickup ‌in the ⁠pace of Japanese rate hikes.

The dollar has fallen 1.5% on the yen in September.

Data to lead

The Fed’s preferred inflation yardstick, US core PCE, is due out later on Wednesday though the market is focused on Friday’s US jobs report which, if strong, could reinforce expectations that US interest rates are on the rise.

Some of those expectations took a hit overnight when influential New York Fed President John Williams said there is “no ​need for urgency” in raising rates. ​Two-year Treasury yields fell about ⁠3.5 basis points and Fed funds futures pricing for a rate hike next month dialled back to 50% from 71%.

Australian inflation figures due later on Wednesday could lend support to the Aussie, which slipped after Reserve ​Bank of Australia Governor Michele Bullock said the board discussed holding rates before announcing Tuesday’s 25-bp hike.

“The ​risk is another ⁠hike by the RBA, possibly as soon as the next policy meeting in November. However, another hike is already priced in by markets,” said Commonwealth Bank of Australia’s head of foreign exchange, Joe Capurso.

“We still consider the next big move in AUD/USD is down not up,” he said. The Australian ⁠dollar hovered ​around $0.6986 early in the Asia session, 20 pips above its overnight low, and the ​New Zealand dollar , which hit its lowest since last November overnight, was pinned at $0.5638.

Sterling touched a three-month trough on Tuesday and last sat nearby at $1.3227. The yuan headed for ​its seventh straight quarterly gain on the dollar in its final session before China’s October 1-7 holidays.

The euro dropped by as much as 0.32percent to USD1.13325, a three-month low, and a fall past its late June levels would take it to the lowest in well over a year, as the currency struggles in the face of a global energy shock and growing political risk in Europe.

But it is by no means unique.

The pound fell 0.25percent to USD1.3221, again in sight of three-month lows hit last week, while the Swiss franc was also weaker at 0.8335 per dollar, its softest in four months. Beyond domestic European reasons for weakness that are sending its currencies lower on the dollar, the greenback also is strengthening. Elevated oil prices and a storming economy have markets pricing in meaningful rate hikes by the Federal Reserve.

That in turn has sent Treasury yields higher across the curve, with the two-year yield - more important than longer dated peers for currencies -around its highest in two years and closing in on the symbolic 5percent level. That yield was a whisker lower on Tuesday, and oil prices steadied, with Brent crude futures at USD104.5 a barrel, though still at painful levels for many energy intensive industries. But investors and analysts are increasingly shifting their view on the dollar.

========================
Open Bid       Rs 277.12
Open Offer     Rs 277.32
========================

Copyright Business Recorder, 2026

======================================================================================
Sep 29, 2026
======================================================================================
                                Currency units per SDR           SDR per Currency unit
======================================================================================
Currency                        28-Sep-26      25-Sep-26      24-Sep-26      23-Sep-26
======================================================================================
Chinese yuan                     0.109538                       0.10966       0.109511
Euro                             0.836722       0.838407       0.836616       0.838139
Japanese yen                   0.00466172     0.00463209     0.00465943
U.K. pound                       0.974938       0.973766       0.973623       0.976262
U.S. dollar                      0.735386       0.735251       0.736004       0.734501
Algerian dinar                 0.00550221     0.00550112     0.00550692     0.00549586
Australian dollar                0.516462       0.516073       0.517558       0.521643
Botswana pula                   0.0552275      0.0552909      0.0553475      0.0556017
Brazilian real                                  0.141435       0.142116       0.142877
Brunei dollar                    0.575284       0.574684       0.574868       0.575538
Canadian dollar                                 0.519796       0.520659       0.521071
Chilean peso                  0.000762769    0.000761358    0.000767158    0.000776535
Czech koruna                                   0.0344235      0.0342886      0.0343723
Danish krone                                    0.112154       0.111913       0.112117
Indian rupee                   0.00766282     0.00766751     0.00767391     0.00767255
Israeli New Shekel               0.239852       0.242417        0.24155       0.243454
Korean won                    0.000543925                                  0.000540074
Kuwaiti dinar                     2.38994                       2.39195        2.38862
Malaysian ringgit                0.180043       0.180319       0.180283       0.180246
Mauritian rupee                 0.0152861      0.0153241      0.0151496      0.0152309
Mexican peso                                   0.0415161      0.0417177      0.0419643
New Zealand dollar               0.416412       0.416115       0.417572        0.41951
Norwegian krone                                0.0773436      0.0775394      0.0776125
Omani rial                        1.91258                       1.91418        1.91028
Peruvian sol                     0.215277        0.21625       0.217753       0.218862
Philippine peso                  0.011716      0.0117537      0.0117149
Polish zloty                     0.191119       0.191452       0.190823       0.192404
Qatari riyal                     0.202029                      0.202199       0.201786
Saudi Arabian riyal              0.196103
Singapore dollar                 0.575284       0.574684       0.574868       0.575538
Swedish krona                                   0.074261      0.0742701      0.0743558
Swiss franc                       0.88426       0.886646       0.889571       0.892565
Thai baht                       0.0219047       0.021997      0.0220189      0.0221195
Trinidadian dollar                              0.109062                      0.108287
U.A.E. dirham                                                   0.20041            0.2
Uruguayan peso                                 0.0182038      0.0183022      0.0183401
======================================================================================

NOTES

(1) The value of the U.S. dollar in terms of the SDR is the recip rocal of the sum of the dollar values, based on market exchange rates, of specified quant ities of the first four currencies shown. See SDR Valuation.

The value in terms of the SDR of each of the other currencies shown above is derived from that currency’s representative exchange rate against the U.S. dollar as reported by the issuing central bank and the SDR value of the U.S. dollar, except for the Iranian rial and the Libyan dinar, the values of which are officially expressed directly in terms of domestic currency units per SDR. All figures are rounded to six significant digits. See Representative Exchange Rates for Selected Currencies.

(2) The value in terms of each national currency of the SDR is the reciprocal of the value in terms of the SDR of each national currency, rounded to six significant digits.

Copyright Business Recorder, 2026

========================
Open Bid       Rs 278.05
Open Offer     Rs 279.15
========================

Copyright Business Recorder, 2026

The Indian rupee had declined 0.2% to 96.1475 in early trading but trimmed losses to close nearly flat at 95.98 as Brent oil prices turned lower on the day, after touching a peak of nearly $108 per barrel.

India imports nearly 90% of its crude requirements, making the rupee one of the world’s most vulnerable currencies to the Middle East oil shock.

Dollar sales by state-run banks, most likely on behalf of the Reserve Bank of India, helped limit the local currency’s fall early in the day and sentiment improved when crude prices cooled, traders said.

The focus is squarely on oil and a break below $100 per barrel would take the rupee to 95.40-50 per dollar while current levels should keep it closer to 96, a trader at a foreign bank said.

US and Iranian officials spoke separately with mediators on Monday as part of a renewed effort to end seven months of war, according to officials of both countries. Over the weekend, US President Donald Trump had said that he had rejected a peace proposal from Iran.

The uncertainty has kept oil prices and US Treasury yields elevated, boosting the dollar. On the day, the US 10-year Treasury yield was a touch higher at 5.246% while the dollar index ticked up 0.3% to 101.5.

“We need to see some stability in bonds for the dollar to correct lower. That relies heavily on oil, and the latest news isn’t encouraging. Upside risks are rising again for the greenback,” analysts at ING said in a note.

Investor attention will also be on key US economic data this week, including job openings data due later on Tuesday, in addition to remarks from a number of Fed policymakers to gauge the future trajectory of interest rates in the world’s largest economy.

At 0625 GMT the ​rand traded at 16.43 against the ⁠dollar , about 0.1% softer than its previous ​close.

The US dollar was steady against a ​basket of currencies, while oil prices rose for a second successive session amid lingering concern over Middle East ​supply disruption.

The South African Reserve Bank ​is expected to release its quarterly bulletin at around ‌0800 ⁠GMT, offering insight into second-quarter foreign direct investment and portfolio flows.

The report will also offer a closer look at household finances, ​which Nedbank ​economists said ⁠appear to have remained resilient despite persistent concerns about the ongoing ​energy shock.

Statistics South Africa is ​due ⁠to release formal sector employment data, excluding agriculture, at around 0930 GMT.

South Africa’s benchmark 2035 ⁠government ​bond strengthened in early ​deals, as the yield fell 2.5 basis points to ​8.89%.

At 0213 GMT, the baht was 0.1% lower at 33.62 versus the dollar, after trading in a range of 33.590 to 33.685.

It ended the previous session at 33.58 per dollar, as per LSEG data.

Wrapping up its September board meeting, the Reserve Bank of Australia board voted unanimously to raise its cash rate by 25 basis points to 4.60%, the fourth hike this year.

Markets had been fully priced for the move, limiting the immediate reaction.

Futures imply a 44% chance of another move in November, with December odds at 60%. Consumer price data for August is due on Wednesday and forecast to show an acceleration to 4.1% from 3.5%, in part due to a jump in fuel costs.

Core inflation is seen staying at 3.6%, well above the RBA’s target range of 2% to 3%.

“That release will be an important gauge of the extent of domestic price pressures and will be a key input into the policy outlook,” said Katherine Palmer, head of fixed income strategy at BlackRock Australia.

“November’s RBA meeting is live, particularly given today’s unanimous decision.”

The Aussie was flat at $0.7014, having steadied above $0.7000 support overnight. Resistance lies at $0.7043 and $0.7139, with major support down at $0.6922. Yields on 10-year bonds were steady at 5.416%, near highs last seen in mid-2011.

Bonds have been swept along in a global selloff but have managed to outperform US Treasuries, shrinking the premium on 10-year debt to 19 basis points from 32 basis points at the start of the month.

The kiwi dollar was a shade lower at $0.5656, as $0.5650 support held for now.

A break would threaten the June low at $0.5627, with resistance around $0.5687 and $0.5748.

Markets imply a 78% chance the Reserve Bank of New Zealand will raise rates by a quarter point to 3.0% when it meets on October 28, and move again by February.

Rates are seen peaking near 4.0% late next year, far above the RBNZ’s own projection of 3.20%.

Yields on 10-year bonds have jumped over the past week to hit their highest since late 2023 at 5.178%, but again have not suffered as much as Treasuries.

The New Zealand government reported a smaller budget deficit on Tuesday and trimmed the amount of debt it will issue in 2026/27 by NZ$4 billion to NZ$30 billion.

The borrowing programme out to 2030 was cut by NZ$15 billion.

The spot yuan opened at 6.7094 per dollar and was last trading at 6.7057 as of 0245 GMT, 61 pips firmer than the previous late session close.

The week-long National Day holiday will start on Thursday, with onshore trading resuming on October 8.

The yuan is expected to trade between 6.5 and 6.9 per dollar for the remainder of the year, supported mainly by continued weakness in the dollar index, Zhang Ming, deputy director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, said in an interview with state media Securities Times.

 “If history repeats itself, the current downcycle in the dollar index, which began in 2023, could last until around 2033,” Zhang said.

However, room for further yuan appreciation is limited, Zhang said, citing the prospect of US Federal Reserve interest rate hikes and a potential further rise in US long-term bond yields.

The dollar hovered near a two-month high on Tuesday as volatile oil prices and a rapid climb in Treasury yields lent support, although gains were limited as traders awaited US data this week for clues on the Federal Reserve’s rate path.

The yuan is up 0.2% against the dollar this month, and 4.3% firmer this year.

Prior to the market opening, the People’s Bank of China set the midpoint rate at 6.7411 per dollar, 234 pips weaker than a Reuters’ estimate.

The deviation is the tightest in two months.

The spot yuan is allowed to trade 2% either side of the fixed midpoint each day.

Should the yuan appreciate too rapidly, potentially harming China’s foreign trade, capital flows and asset prices, the central bank still has an ample toolkit and extensive experience to respond, Zhang said. Common measures include stepping up macro-prudential management of capital flows and activating the counter-cyclical adjustment factor.

The offshore yuan traded at 6.7067 yuan per dollar, up about 0.09% in Asian trade.

The dollar index, which measures the greenback against a basket of six currencies, stood flat at 101.19.

The Indian rupee is expected to open in the 95.99-96.02 range, per traders, after settling at 95.9825 per dollar ​on Monday.

India’s central bank may be reluctant to see the rupee ​break past the psychologically important 96-per-dollar mark and could intensify ⁠its intervention, having been a near-daily presence in the market in recent ​weeks, market participants said.

Analysts have noted that the Reserve Bank of India ​has higher firepower to do so following the recent build-up in foreign exchange reserves from inflows linked to special measures it has introduced.

“The RBI intervention is a given at ​this point. The real question is whether it is going to keep ​defending levels, or simply smooth the move and let the rupee adjust more,” a currency ‌trader ⁠at a bank said.

The rupee has been under persistent pressure from the stubbornly high oil prices, while a jump in US yields and a hawkish repricing of Federal Reserve policy expectations have compounded the strain. The dollar index ​is trading near a ​two-month high.

Markets now ⁠see a near 70% probability that the Fed will follow this month’s rate hike with another increase in ​October, up from less than 20% a month back.

US yields ​ratchet higher

US ⁠Treasury yields rose on Monday with the surge in oil prices stoking concerns that inflation could prove stickier, raising the prospect of further Fed rate ⁠increases. The ​10-year US yield climbed 6 basis points ​to 5.24%, hovering near a nearly two-decade high.

Oil prices rose on Tuesday on concerns over prolonged ​supply disruptions in the Middle East.

The euro traded near its weakest level in three months at $1.1367 after the European Central Bank’s chief signalled measured steps to quell inflation. Sterling was steady at $1.3248, also not far ​from a three-month trough.

The dollar index , which measures the US currency against a basket of peers, was ​a touch higher at 101.2 and on track for a 1.8% advance this month, its best ⁠performance since June.

Oil prices crept back up with Brent crude futures last near $106 a barrel as markets doubted that renewed ​efforts to end the Iran war would get anywhere after US President Donald Trump rejected Tehran’s ceasefire proposal.

Meanwhile, a deepening selloff ​in US Treasuries pushed yields to new peaks, with the 10-year benchmark at its highest since 2007 and the 30-year at its highest since 2004.

The monetary policy-sensitive two-year yield also rose to its highest in more than two years, closing in on 5%.

The dollar is ​making limited gains for now as investors awaited US data later in the week, while markets have gradually grown desensitized ​to oil moves and a global bond sell-off has neutralized the boost to the dollar from higher Treasury yields, said Joseph Capurso, ‌head of ⁠foreign exchange at the Commonwealth Bank of Australia.

“We’re more likely to get stronger US economic data which shows that the US economy is exceptional, and I think that’s going to help to push up US interest rates compared to elsewhere, and help push up the US dollar.”

US data releases later in the week, including the PCE price index on Wednesday ​and nonfarm payrolls on Friday, ​are both expected to support ⁠the case for further Fed rate hikes.

Markets are now seeing a more than 70% chance of a rate hike from the Federal Reserve at the end of October, up from ​57% a week ago, according to CME Group’s FedWatch tool.

The Reserve Bank of Australia ​is expected to ⁠raise the key rate later on Tuesday, and the Australian dollar and the kiwi both traded 0.1% lower at $0.7013 and $0.5660, respectively.

The Japanese yen weakened a touch to 157.40 per dollar, giving back a chunk of Monday’s gain after Japan’s top currency diplomat ⁠Atsushi Mimura said ​markets should heed the “very clear” warning Tokyo and Washington delivered last week ​on the yen, leaving traders on edge over the risk of intervention.

Elsewhere, the offshore yuan was little changed at 6.71 per dollar after Trump and ​Chinese President Xi Jinping’s three-day summit last week yielded limited outcomes.

The US-Iran standoff continued after the US rejected Iran’s peace proposal over the weekend, spurring another leg higher in oil prices, keeping an October Fed hike in play and pressuring global bonds. Ten-year US Treasury yields held above 5.1percent and the greenback is near a two-month high.

A prolonged period of higher energy prices is seeding inflation risks in oil- and natural gas-importing economies and threatening to widen fiscal gaps. Rising US yields also threaten to divert capital towards dollar assets, undermining emerging Asian currencies.

“US yields have risen faster than local yields across several Asian markets, widening the US yield advantage and weakening relative rate support for regional currencies,” Lloyd Chan, FX strategist at MUFG said in a note.

Thailand’s baht weakened as much as 0.8percent to 33.635 against the dollar, its lowest since late July.

Currencies of oil importers that run a current account deficit, including Indonesia’s rupiah, the Indian rupee and the Philippine peso, all depreciated between 0.1percent and 0.4percent. The three currencies have been the biggest laggards in the region this year, with Indonesia’s rupiah faring worst, down over 7percent.

The deterioration in relative-rate support has been particularly pronounced in Thailand and Indonesia, leaving both currencies exposed, Chan said.

Thailand’s weak economic growth limits the scope for tighter monetary policy to counter external pressures, while Indonesia has increasingly relied on non-rate measures to support the rupiah even as foreign portfolio outflows have resurfaced, he added.

Data from last month showed Thailand’s economy expanded 1.9percent year-on-year in the second quarter, down sharply from 2.8percent growth in the quarter prior.

The dollar index, which measures the US currency against a basket of peers, was little changed at 101.14 but was still set for a 1.7percent gain this month, its biggest monthly gain since June. The euro was a shade weaker at USD1.1376, hovering near a two-month low against the dollar and on course for a 2percent decline in September. Sterling was up a touch to USD1.3260, but remained close to a three-month low of USD1.3204 hit last week.

The market’s focus is set to turn to US data releases as the week unfolds, with the PCE Index on Wednesday and nonfarm payrolls on Friday both expected to be consistent with further policy tightening. “Data could re-emerge as a primary driver for the dollar this week,” said ING FX strategist Francesco Pesole.

“After a good dose of hawkish Fedspeak and Brent staying supported above USD100 per barrel, markets now need fresh evidence of US economic strength to solidify expectations of an October 28 rate hike.”

Currently, markets see a 65percent chance of a quarter-point rate hike from the Fed at the October meeting, according to the CME FedWatch Tool, after the central bank raised its interest rate at the September meeting.

Other data for the week include China PMIs on Wednesday ahead of the week-long National Day holidays and euro zone inflation data on Friday.

YEN STRENGTHENS AFTER WARNING The yen rose to 156.75 per dollar after Japan’s top currency diplomat Atsushi Mimura said on Monday that markets should take at face value the “very clear” message Tokyo and Washington delivered last week on the yen.

Japan’s Finance Minister Satsuki Katayama and US Treasury Secretary Scott Bessent reaffirmed last week that the two nations intend to strengthen cooperation to address yen weakness.

Meanwhile, data on Monday showed Japan’s service-sector inflation rose in August at the fastest annual pace in more than two years, highlighting mounting price pressures and bolstering the case for faster rate hikes from the Bank of Japan.

The Australian dollar fetched USD0.7016 and the kiwi was at USD0.5663. The Reserve Bank of Australia is expected to raise interest rates by 25 basis points to a near 15-year high of 4.60percent on Tuesday. Elsewhere, China’s offshore yuan strengthened slightly to 6.7159 per dollar, after Trump and Chinese President Xi Jinping’s three-day summit did not yield any big public breakthroughs on a host of contentious issues.

========================
Open Bid       Rs 277.15
Open Offer     Rs 277.35
========================

Copyright Business Recorder, 2026

========================
Open Bid       Rs 278.17
Open Offer     Rs 279.23
========================

Copyright Business Recorder, 2026

Dollar sales from state-run banks, most likely on behalf of the Reserve Bank of India, curbed losses with the rupee settling down 0.2% at 95.9825 per dollar.

Brent crude rose nearly 4% to $108.2 per barrel. US President Donald Trump rejected Iran’s peace plan, but told Axios in a phone interview that he expected US negotiators to engage in more talks this week.

Investors responded by pushing bond yields higher and stocks lower. MSCI’s gauge of Asian stocks fell nearly 1% while stocks in Mumbai declined nearly 1.5% to their lowest level since April.

India imports nearly 90% of its crude requirements, making the rupee one of the world’s most vulnerable currencies to the Middle East oil shock.

“Several investors just have an outright bearish view on all EM Asia high-yield currencies, including the PHP, IDR and INR, given their vulnerability to higher energy costs,” analysts at Goldman Sachs said in a note, summarising feedback from investors located in the UK.

Goldman, meanwhile, says the RBI has the ability to keep the rupee within the 94-97 range, or at least manage the pace of its depreciation.

A glut of capital inflows sparked by policy measures has given the Indian central bank ammunition to go against the tide but investors are keeping an eye on the persistence of that defence. Between June 8 and September 18, these measures drew in $143.6 billion.

“For now, 96 is the floor under INR and it doesn’t seem like the RBI will allow a move past that,” a trader at a foreign bank said.

At 0734 GMT the rand traded at 16.40 against the dollar , about 0.5% weaker than its previous close.

Oil prices climbed more than 3% on Monday with Brent crude futures last above $107 a barrel, after US President Donald Trump rejected a peace deal with Iran to resolve their conflict and reopen the Strait of Hormuz.

South Africa imports most of its fuel, leaving the economy vulnerable to swings in global oil prices since the Iran conflict began in late February.

“Volatility in the rand could be elevated this week as the data calendar is jam-packed with data out of the US, culminating in the US non-farm payrolls on Friday,” said Andre Cilliers at TreasuryONE. On the Johannesburg Stock Exchange, the Top-40 index fell 1.7% in early trade.

Gold Fields led losses, dropping about 13% after Australia’s Northern Star Resources said it had rejected an unsolicited A$38.7 billion ($27.1 billion) takeover approach.

South Africa’s benchmark 2035 government bond also weakened, as the yield rose 5.5 basis points to 8.855%.

The Aussie was flat at $0.7020, after losing 1.5% last week to hit an eight-week low of $0.7004.

It was the third straight week of declines that broke key support at the 200-day moving average of $0.7025, leaving it well below a four-month peak of $0.7238 seen just a little over two weeks ago.

The losses came despite markets narrowing the odds on further rate rises, with the Reserve Bank of Australia now considered all but certain to hike by 25 basis points to 4.60% on Tuesday, its fourth rate hike this year.

Markets are currently pricing in about 40 basis points of more tightening after Tuesday.

“AUD/USD may receive some brief support from a ‘hawkish hike’ by the Reserve Bank on Tuesday,” said Joseph Capurso, head of foreign exchange at the Commonwealth Bank of Australia.

But Capurso said he still expected the Aussie to fall this week, likely testing $0.6951.

“The strength of the US economy is attracting capital and weighing on all currencies… Strong economic growth and weak growth in the labour force is a recipe for ongoing high inflation.”

On Wednesday, Australia will publish the monthly inflation data for August.

Forecasts are centred on an annual rise of 4% in headline inflation, picking up from 3.5% in July, as petrol costs jumped, while underlying inflation remained sticky at 3.6%.

Across the Tasman Sea, the kiwi hit a three-month low of $0.5650, after losing 1.1% last week to mark the fifth straight week of declines. Support is now at the July low of $0.5627.

Paul Bloxham, chief economist at HSBC, expects the Reserve Bank of New Zealand to turn more hawkish after two rate hikes this year, with the economic recovery gathering pace.

“For New Zealand, a well-below neutral cash rate starting point has driven a need to hike faster,” said Bloxham.

“We see the RBNZ hiking again in Q4, now more likely in October given recent hawkish remarks, and twice more in H2 2027.”

Markets now imply an 80% chance that the Reserve Bank of New Zealand will hike by a quarter point to 3.0% at its next meeting on October 28 and ultimately take rates toward 4.0%.

At 0222 GMT, the baht was 0.46% lower at 33.52 versus the dollar, after trading in a range of 33.430 to 33.565.

It ended the previous session at 33.37 per dollar, as per LSEG data.

 But analysts expect the yuan will continue to strengthen on the back of China’s robust exports, although at a slower pace, as potentially higher US interest rates will increase the dollar’s appeal.

“Following the meeting between Chinese and US leaders, trade and geopolitical factors have receded to the background, at least for now,” Huatai Futures said in a report.

Underpinned by strong exports, “the yuan remains on an appreciation path, but with a slower upward slope.”

The onshore yuan changed hands at 6.7142 against the dollar in late-morning trade, 0.03% weaker than the previous session’s close.

 The dollar index rose slightly to 101.09, flirting with a two-month high.

 The United States and China have agreed to reduce tariffs on $30 billion of goods in each direction, and launch a dialogue on AI, after President Xi wrapped up a three-day visit to the US

Fresh data on Monday showed China’s industrial profit growth slowed further in August as economic imbalances deepen.

 “With the US and China striking the tariff reduction agreement, Chinese exports will likely remain strong, helping to keep the yuan on a firm footing in the fourth quarter,” COFCO Futures said in a report.

But the brokerage flagged the risks of a further widening in the US-China yield spread, and changes in external demand.

Huatai Futures also pointed out that the dollar is drawing support from inflation expectations and rising interest rates.

Although the yuan is increasingly insensitive to the dollar strength, “the climbing US Treasury yields will rein in the yuan’s appreciation.”

 The People’s Bank of China on Thursday vowed to stabilise market expectations, and called for “guarding against herd behavior in the market”.

Prior to market open, the central bank set the yuan’s midpoint at 6.7399 per dollar, the strongest since February 3, 2023.

The euro and sterling were both 0.1% weaker against the dollar, last at $1.1379 and $1.3232, respectively, hovering near multi-month lows against the greenback.

The dollar index , which measures the US ​currency against a basket of peers, was a touch higher at 101.15 and on track for ​a 1.7% gain in September, its best month since June.

Oil prices climbed more than 1% ⁠on Monday with Brent crude futures last above $106 a barrel, after US President Donald Trump rejected a peace deal ​with Iran to resolve their conflict and reopen the Strait of Hormuz.

Energy supply risks and robust fundamentals in the ​US have heightened inflation concerns and prompted traders to price in a more hawkish Federal Reserve, while elevated long-end Treasury yields also supported the dollar.

“The greenback could overshoot in the near term if energy market tensions persist and inflation risks continue to build,” ​said Sim Moh Siong, FX strategist at OCBC.

The bank’s base case remains for a moderate USD rally into ​year-end, he added.

The market’s focus is set to turn to US data releases as the week unfolds, with the PCE ‌Index ⁠on Wednesday and non-farm payrolls on Friday both expected to be consistent with further policy tightening.

Currently, markets are seeing a 65% chance of a rate hike from the Fed when the central bank meets next at the end of October, according to CME Group’s FedWatch tool.

Other data for the week include China PMIs on Wednesday ​ahead of the week-long ​National Day holidays and ⁠Japan and euro zone CPIs on Friday.

The yen was last down 0.3% at 157.7 per dollar. It gained on Friday after Japan’s Finance Minister Satsuki Katayama and ​US Treasury Secretary Scott Bessent held a call on Friday and reaffirmed that yen ​undervaluation is a ⁠matter of concern and that the two nations intend to strengthen cooperation.

The Australian dollar fetched $0.7017 , down 0.07%, and the kiwi traded flat at $0.5661 .

The Reserve Bank of Australia is expected to raise interest rates by 25 basis points to a ⁠near ​15-year high of 4.60% on Tuesday, expected to be the final ​rate increase in the tightening cycle.

Elsewhere, offshore yuan weakened to 6.7235 per dollar after Trump and Chinese President Xi Jinping’s three-day summit did not ​yield any big public breakthroughs on a host of contentious issues.

The Indian rupee is expected to ‌open slightly weaker, having settled at 95.8125 to the dollar on Friday, according to traders.

For currency traders, the 96-per-dollar mark has become an increasingly important level over the ​past two weeks, with the Reserve Bank of India repeatedly stepping ​in when the currency approaches it.

The central bank’s intervention has so ⁠far kept the rupee from sustaining a dip past 96, despite pressure ​from higher oil prices, rising US Treasury yields and a firmer dollar.

“The RBI ​is providing a reliable buffer for now against all the negatives (for the rupee),” a currency trader at a bank said.

“The question is how long it can hold 96 if ​oil and US yields keep pushing higher. Importers are responding by increasing ​their hedging.”

Oil, US bond headwinds persist

Oil prices rose on Monday after US President Donald Trump ‌rejected ⁠an Iranian proposal to resolve the conflict and reopen the Strait of Hormuz, keeping tensions in the Middle East high and fuelling concerns about prolonged disruptions to oil supplies.

Brent crude climbed 2.5% to around $107 a barrel in ​Asian trading, with the ​move higher spilling ⁠over into US bonds. The 10-year Treasury yield rose to 5.2%, lifting the dollar and adding to pressure on ​the rupee and other Asian currencies.

Longer-dated US Treasury yields ​have jumped ⁠in recent sessions following robust economic data, which has compounded concerns over the inflationary impact of higher oil prices.

The 10-year and 30-year yields are now at ⁠their ​highest levels in nearly two decades.

The upbeat economic data ​has lifted expectations for another US rate hike, with traders pricing in a more than 64% ​chance of a move in October.

The rupee closed at 95.8125 per dollar, up slightly from its close at 95.9550 in the previous session. The currency was little changed on the week.

Oil prices fell about 2 percent on Friday, though remained north of USD100 per barrel as investors weighed attacks against Saudi Arabia by Houthi fighters against the possibility a truce between the US and Iran amid ongoing diplomatic efforts.

Elevated energy prices have also lifted global bond yields as investors wager that central banks will need to raise borrowing costs to combat inflation.

“Markets remain reluctant to price in any optimism into oil prices, which keeps risks on the upside for rates,” analysts at ING said in a note.

Higher rates exert pressure on risk assets like emerging market currencies and equities. India’s benchmark stock index posted its longest weekly losing streak in six years on Friday.

Persistent intervention by the Reserve Bank of India have, however, contained pressure on the rupee, traders said. The central bank has also used sell-buy swaps to mop up excess rupee liquidity from the banking system.

The swaps, alongside relatively lower liquidity in the forward market and the cutting of stale received positions, pushed dollar-rupee forward premiums up sharply this week, a swap trader at a bank said.

The 1-year forward yield rose as much as 28 basis points in three sessions to touch 3.50 percent on Friday, its highest level since May.

“Typically, such sharp moves cool off after market positioning gets lighter,” another swap trader at a bank said.

“That should happen (this time too), but global risk factors could keep positioning light for the time being,” the trader added.