Anna 
The Indian rupee reached its strongest level in three weeks on Monday, benefiting from widespread offers to sell dollars, particularly as mixed U.S. economic data failed to provide significant support for the greenback.
As of 10:08 a.m. IST, the rupee stood at 83.06 against the U.S. dollar, marking a 0.1% increase compared to its previous close at 83.15. The currency reached an intra-day high of 83.0550 during early trading.
While the dollar index remained relatively stable at 102.49, it had surpassed the 103 handle on Friday following the release of data indicating that the U.S. economy had added more jobs than expected in December. However, the dollar retreated from these gains after the ISM services purchasing managers’ index revealed a considerable slowdown in the U.S. services sector for December.
The rupee’s rise was supported by a general willingness to sell dollars across the market, according to a foreign exchange trader at a state-run bank. The trader also noted that a break above the rupee’s “strong resistance” at 83 could open up further room for appreciation.
Meanwhile, Brent crude oil futures experienced a decline of over 1%, dropping to $77.93 per barrel due to significant price cuts by Saudi Arabia and an increase in OPEC output.
Amit Pabari, Managing Director at FX advisory firm CR Forex, highlighted that ongoing dollar inflows and robust domestic economic data could continue to support the rupee’s strengthening. The focus for the week will be on U.S. consumer inflation data scheduled for Thursday, as investors evaluate its potential impact on Federal Reserve rate cut expectations.
Currently, investors are pricing in a nearly 64% chance of a Fed rate cut in March, a slight decrease from 68% as of January 5, according to CME Group’s FedWatch tool.
