The Indian rupee closed weaker on Thursday after oil prices rose and domestic equities reversed, erasing early gains driven by a pickup in foreign portfolio inflows, while traders also awaited India's inflation data due later in ?the day. Foreign portfolio inflows inject dollar supply into the rupee market, aiding the currency. A pickup in flows helped boost the rupee to a peak of 93.62 in early trading — its strongest level since April. The currency eventually pared gains as oil prices turned higher and local stocks gave up intraday gains to trade flat. Strong dollar bids from a state-run lender also weighed on the rupee in afternoon trade, while a clutch of other public sector banks were seen offering dollars near the 94 mark. Elevated oil prices threaten to slow growth and lift inflation in India. Traders will pay close attention to the October consumer inflation data due at 4 p.m. IST on Thursday. Higher oil prices and a weak monsoon have contributed to cost ?pressures in India, prompting markets to price in nearly 100 basis points of policy rate hikes by the RBI over the next 12 months. Economists polled by Reuters expect the data to show that headline CPI rose 5.93% last month, nearing the upper limit of the Reserve Bank of India's inflation tolerance band. The pound was little changed against the dollar on Thursday, after UK economic growth data matched expectations and markets awaited comments from a key Federal Reserve policymaker. Sterling was down 0.06% at $1.3271, ?but edged up to 83.57 pence per euro , near May 2025 highs. The dollar, meanwhile, climbed to a 19-month high against a basket of major currencies . Official data showed Britain's gross domestic product grew 0.7% in the third quarter, in line with expectations and the fastest pace in two and a half years. Oil ?prices rose on Thursday by more than $1 a barrel, as continued disruptions to shipping through the Strait of Hormuz and broader geopolitical tensions offset pressure from rising crude output that had sent prices lower in early trade. Brent futures were up $1.2 or 1.3% a barrel at $93.96 at 12:08 p.m. ET or 1508 GMT. US West Texas Intermediate crude was up 53 cents or 0.6% at $87.06.
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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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