CURRENCY OVERVIEW

The Indian rupee weakened at Tuesday's open, weighed down by the same sticking points seen in recent sessions, a persistent oil rally fuelling inflation worries and lifting U.S. yields. Pressure on the rupee is likely to persist this week as oil prices stay above $100 a barrel and expectations of a U.S. Federal Reserve rate hike grow, also weighing on government bonds.The rupee fell more than 1% last week to close at 95.55 per dollar on Friday. Indian financial markets were shut on Monday for a local holiday.The 95.80-per-dollar level is seen a key near-term support for the rupee, with the Reserve Bank of India repeatedly stepping in to defend the currency around that level. The ?central bank was seen selling dollars near 95.80 on Friday, while similar intervention was reported in mid-August when the RBI repeatedly kept the currency from weakening beyond the 95.80 mark. Japan's government is set to ‌finalise on Tuesday an outline for a consumption tax cut and payouts to households with no mention of how to fund the measures, a move that may keep alive market concern over the nation's already strained finances. The cabinet approval of the tax cut outline, expected later on Tuesday, would come as global fiscal and inflation concerns lifted the benchmark 10-year Japanese government ?bond (JGB) yield above the key 3% mark on Tuesday.Asian shares struggled on Tuesday as investors weighed Middle East tensions and calls by industry figures for a slowdown in AI development, while elevated oil prices and higher bond yields ‌added to caution before key central bank meetings in the U.S. and Japan. Renewed supply concerns kept markets on edge, with U.S. crude rising 1.27% to $102.68 a barrel while Brent was up 1.21% to $106.96 per barrel after fresh strikes on Saudi energy infrastructure and attacks on ships in the Middle East raised concerns over supply disruptions.