CURRENCY OVERVIEW

The Indian rupee opens flat and is likely to remain on the defensive on Friday as markets weigh the possibility of a truce between the US and Iran and gauge the impact of soaring global bond yields that ‌have intensified headwinds facing risk assets. The rupee is expected around the 96 per dollar mark, marginally weaker from its close at 95.9550 in the previous session and vulnerable to deeper losses. In lieu of this, it has been reported - India's central bank likely sold dollars before the ‌local spot market opened on Friday, helping the rupee hold ?stronger than the key psychological 96-per-dollar level. The rupee rose to 95.88 per dollar on the interbank order-matching system, paring its decline from ‌95.97 ?in early deals. the central bank likely intervened to shore up ?the rupee at a time when trading liquidity is ?low, helping the intervention have a ?magnified impact. The dollar was set for its first back-to-back weekly gains in more than three months on Friday, as surging Treasury yields and mounting bets on further Federal ‌Reserve rate hikes kept the greenback near multi-month peaks. The dollar index , which measures the US currency against a basket of peers, has climbed more than 1% this week to a two-month high, marking its first back-to-back weekly gains since June. However, the rally was losing some momentum, last edging a touch lower at 101.2 Markets have aggressively repriced the interest rate trajectory after the Fed tightened policy last week, while robust economic data and fresh energy supply concerns have further strengthened that conviction. A bond selloff which ?sent long-dated US Treasury yields to their highest in more than 20 years, also gave the greenback a leg up. Yen under watch as Fed bets build. At 158.8 per dollar, the Japanese yen continued to hover near a three-week low after markets judged the Bank of Japan's rate hike to a ?31-year high and policy guidance last week as not hawkish enough . However, moves were tempered as traders remained wary of official intervention risk after Tokyo issued fresh verbal warning, while a former BOJ board member said the central bank now could raise rates every quarter. Dollar strength pushed the euro to a two-month low of $1.1370 and put it on track for a third weekly decline, its worst losing streak since the end of 2025. Sterling languished near a three-month low of $1.3220 and was on track for its worst weekly performance in four months. Oil prices jumped more than 3% on Thursday to a one week high after a Houthi missile attack on Saudi Arabia revived ‌fears ?of supply disruptions, adding to inflation risks. The return of oil above $100 a barrel, with Brent crude ‌near $105, has revived inflation fears, bolstering bets on multiple Federal Reserve rate hikes after its first move in more than three years and putting the dollar on track for a 1% weekly gain. Gold prices ticked up on ‌Friday but were set to post a weekly loss, pressured by a stronger dollar and growing expectations that the Federal Reserve will keep interest rates elevated to contain inflation. Spot gold rose 0.2% to $4,288.36 per ounce by 0200 GMT, but was down 2% so far this week. US gold futures edged 0.6% higher to $4,323.10.