Ella 
The Indian rupee gained in early European trading on Monday.
Federal Reserve rate cut hopes and lower crude oil prices supported the Indian rupee.
Renewed dollar demand may limit gains in the Indian rupee.
The Indian rupee (INR) strengthened on Monday. Expectations that the U.S. Federal Reserve (Fed) may cut interest rates in September boosted the Indian rupee. Lower U.S. interest rates are likely to boost capital flows to higher-yielding emerging market assets, benefiting the Indian rupee. Moreover, as India is the world’s third-largest oil importer and consumer, a pullback in crude oil prices from four-week highs also supported the local currency, helping to mitigate the depreciation of the Indian rupee.
However, renewed dollar demand amid cautious sentiment may weaken the Indian rupee. Looking ahead, investors are awaiting testimony from Federal Reserve Chairman Jerome Powell on Tuesday. Investors’ attention will turn to the U.S. Consumer Price Index (CPI) inflation data for June, due on Thursday.
