CURRENCY OVERVIEW

The Indian rupee dropped to its weakest level in two months as global bond yields surged to decadal highs and oil prices jumped, deepening pressure on the South ‌Asian currency that was already hurt by foreign portfolio outflows on Thursday. The rupee ended down 0.5% at 96.3150 per dollar, its sharpest single-day fall in more than two months after it breached the key psychological barrier of 96 even as dollar sales by state-run banks limited its fall. Prevailing pressures on the rupee have also kept ?exporters reticent about hedging their receivables even as importer hedging remains robust, exacerbating the demand-supply mismatch in the foreign exchange market. Exporters should hedge cautiously and ?only to the extent of in-hand orders while importers are advised to hedge on any dips on the dollar-rupee pair. Elsewhere, Asian currencies were down between 0.1% and 0.4% while the ?dollar index rose 0.5% to nearly 102. Investors now await a key US labour market report due on Friday, while Indian financial markets will be shut for a local holiday. The dollar rose to a 17-month high against the euro on Thursday amid a selloff in government ‌bonds across the US and Europe, which pushed Treasury yields to fresh peaks as higher oil prices fanned inflation. The 10-year US Treasury yield , a yardstick for borrowing costs and asset prices globally, rose to 5.34%, its highest since 2002. The pound fell on Thursday to its lowest in three months against the dollar, as another wave of worry about high rates, oil prices and persistent inflation rattled European markets. Sterling fell by as much as ‌0.5% on the day to a low of $1.3193, breaking the $1.32 mark for the first time since late June. It was last down 0.3% at $1.3225. Investors are fretting about the long-term impact of oil above $100 a barrel from a protracted Middle East war, along with the higher borrowing costs and inflation that might follow. he Canadian dollar steadied near an 18-month low against its US counterpart on Thursday, with the loonie performing better than most Group of Ten currencies as the greenback notched a broad-based advance. The loonie was trading nearly ‌unchanged at 1.4235 per US dollar, or 70.25 US cents, after touching its weakest intraday level since April 2025 at 1.4263. It follows eight straight daily declines for the currency, the longest such streak since May. ‌The euro ?hit its lowest point in 17 months, as investors battered European assets, with the European currency falling below $1.13 for the first time since May 2025 against the dollar. The euro was last down 0.79% at $1.1238. Oil prices extended recent gains, with US crude up 1.52% at $91.79 a barrel and Brent at $100.78 per ?barrel, up 2.81% on the day. Gold prices edged higher on Thursday as softer-than-expected US inflation data reduced bets ‌for a Federal Reserve rate hike in October, while investors await key US jobs data due later this week. Spot gold edged 0.2% higher to $4,165.29 per ounce by 2:08 p.m. EDT (1808 GMT), while US gold futures for December delivery settled 0.4% higher at $4,202.30. Gold prices fell over 6% in September. HSBC cut its average gold price forecasts for 2026 and 2027 to $4,490/oz and $4,825/oz, respectively, saying gold could face further near-term pressure but was likely ?nearing a bottom. Among other metals, spot silver rose 0.2% to $60.51, platinum gained 0.1% to $1,707.56, while palladium dipped 2.2% to $1,178.57.