The Indian rupee declined for the third consecutive trading session on Monday as importers stepped up dollar purchases, while elevated oil prices and foreign outflows also weighed on the local currency. The rupee opened little changed against the US dollar, but slipped to end at 95.1850, down 0.3% for the day. It has fallen about 0.8% in three sessions. Higher oil prices could widen India's import bill, stoke inflationary pressures and weigh on sentiment towards the rupee. The benchmark Brent crude has held well above $110 a barrel, keeping risk appetite fragile. Concerns over India's external finances persist, testing the Reserve Bank of India's efforts to stem the rupee's losses.Oil impacts can also push companies to increase currency hedges and make foreign investors more cautious about Indian assets. the US Federal Reserve's upcoming policy decision will be key drivers of the Indian rupee and government bonds this week, while domestic liquidity conditions pose an additional challenge for bonds. The euro rose against the safe-haven yen and held steady against the dollar on Monday as falling oil prices and an unchanged French credit rating reduced pressure on the single currency ahead of a busy week of central bank meetings. The euro was flat at $1.1201 and up 0.37% at 176.15 versus the yen . Brent crude futures eased but still held near six-month highs. Elevated oil prices weigh on import-dependent economies such as the euro zone. The Japanese yen fell 0.25% to 157.28 per dollar. Investors will focus on any clues about the rate outlook, as a potential AI-driven selloff in US stocks could tilt the Fed towards a more dovish stance. Sterling fell against a strengthening euro on Monday after hitting a roughly 17-month high on Friday, with investors avoiding taking big positions ahead of Wednesday's budget announcement in a week packed with central bank meetings. The pound dropped 0.31% to 83.98 pence against the euro after reaching 83.63 pence on Friday, the highest level since the end ?of May 2025. It was down 0.15% at $1.3348. Investors will closely watch the outcome of central bank meetings later this week, with policy decisions due from the Federal Reserve, European Central Bank, Bank of Japan, Reserve Bank of New Zealand and Bank of Canada. Gold prices rose on Monday, rebounding from the previous session's over three-month low, as retreating oil prices tempered inflation concerns ahead of this week's US Federal Reserve meeting. Spot gold rose 0.3% to $4,007.57 per ounce by 9:23 a.m. EDT (1323 GMT) after hitting $3,975 on Friday, its lowest level since July 20. Higher rates increase the opportunity cost of holding non-yielding gold. Fed policymakers have telegraphed they will not raise US -Short term borrowing. costs again this week, but with inflation concerns still front and centre, investors believe a rate-hike pause will not ?last for long. Among other metals, spot silver was down 0.4% at $53.67 per ounce, platinum slid 1% to $1,534.80, while palladium rose 0.4% to $1,048.37.
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The euro rebounded on Tuesday and was on pace for its strongest move higher in a month after falling to its lowest in 17 months in the prior day, as a pullback in French government bond yields cooled fears about strain in euro zone debt markets. The euro zone's currency climbed 0.28%, on track for its biggest daily gain since September 3, at $1.1252. the currency had slid to its lowest since May 2025 on Monday at $1.116, following a drop of more than 1% in the prior week, its fourth straight weekly decline. The dollar index , which measures the greenback against a basket of currencies, fell 0.26% to 101.89 and was on pace for its biggest daily drop since September 25. Bond markets around the world have seen yields rise due to expectations of sharp central bank rate hikes as energy prices have jumped due to the US-Israeli war with Iran and fanned inflation, as well as concerns about government finances. France is at the heart of the European market concerns. The French government is seeking to enact an unpopular 2027 budget to lower its deficit and contain its record-high debt load, a tall order in a deeply divided parliament as political factions position ahead of next year's presidential election. With inflation already rising on soaring energy costs and higher yields increasing household and corporate borrowing costs, further euro weakening could leave the European Central Bank caught between fighting inflation and calming bond markets.
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