Indian rupee nudges up on-week; traders stay cautious as oil firms, US payrolls loom

MUMBAI: The Indian rupee ended little changed on Friday and firmed modestly week-on-week as central bank intervention blunted pressure from higher oil prices, which added to traders’ caution heading into a key U.S. labour market report.

The Indian rupee closed at 95.2075 per dollar, barely changed from its close at 95.22 in the previous session, but up about 0.2% week-on-week.

Oil prices rose 0.3% to $82.7 on Friday on concerns surrounding the reopening of the Strait of Hormuz and potential Iranian bans and fines on vessels it deems hostile or in violation of proposed rules.

Uncertainty over the Middle East conflict remains a key overhang on markets, spurring traders to avoid holding positions heading into the weekend.

On Friday, dollar sales by state-run banks, most likely on behalf of the Reserve Bank of India, kept the rupee on a tight leash, with the currency’s intra-day range shrinking to a multi-month low.

Strong inflows under measures to strengthen India’s balance of payments have bolstered the central bank’s ammunition to defend the rupee.

India’s largest lender, State Bank of India, has raised about $6 billion under a scheme to attract overseas FX deposits, and it expects its final tally to stand at about $10 billion by the end of September.

Later in the day, focus will turn to the U.S. non-farm payrolls data for the previous month.

U.S. job growth is expected to have picked up in July, offering reassurance that the labour market remained resilient and allowing the Federal Reserve to maintain its focus on inflation.

“Our call remains one of USD weakness in the next couple of months as we expect the Fed to stay on hold this year,” ING said in a note. Interest rate futures markets, meanwhile, are pricing in about 30 basis points of rate increases over the remainder of 2026, per LSEG data.