The Rupee closed little changed on Monday, wedged between dollar sales spurred by the unwinding of arbitrage positions and importers' ?hedging demand amid swirling risks from the Iran war. The currency rose to a two-week high of ?92.7925 in early trading on Monday, but shed much of it as ?importers stepped in to lock in hedges, while traders also pointed to dollar demand ?linked to foreign portfolio outflows. Thin forward market liquidity amid uncertainty over the fallout of the RBI's measures to curb FX arbitrage trades amplified the move, along with a shift of offshore ?positions to the onshore market. The 1-year dollar-rupee implied yield touched a peak of 3.96% before ?retreating to 3.57%. Concurrently, India's one-year OIS rate fell nearly 20 basis points to 6.17%, signalling disparate price action ?in ?markets that typically move in congruence with each other. The U.S. dollar fell on Monday, while the yen flirted with the crucial 160 per dollar ?level, as investors took stock of the escalating the Iran war with all eyes on the latest deadline from U.S. President Donald Trump ?to reopen the Strait of Hormuz. The euro was at $1.1563, while sterling last fetched $1.326. The dollar index , which measures the ?U.S. currency against six others, edged down to 99.809. With many Asian and European markets closed on Monday, liquidity is likely to remain thin. The ?Australian dollar was 0.7% higher at $0.6932, wobbling near last week's two-month low. The Hormuz closure has pushed oil prices well above $100 ?per barrel, ?stoking fears of high inflation and upending the outlook for interest rates across the world. Worries about the hit to economic growth have also weighed as stagflation risks swirl. Traders are now no longer pricing a rate cut from the Federal Reserve until well into the second half of 2027, compared with expectations of two reductions in 2026 at the start of the year. The Japanese yen was nearly flat at 159.455 per U.S. dollar, not ?far from the 21-month low hit ?last week as traders watch for ?indications of Tokyo intervening in the wake of strong warnings from officials in the past few days. Still, many doubt the firepower of any intervention at ?a time when geopolitical ?turmoil in the Middle East is fueling relentless demand for the safe-haven dollar. The yen is down 1.5% since the war started, stuck close to the 160 level.......