The rupee closed at 86.4050 against the U.S. dollar, barely changed from its close at 86.4075 in the previous session.
Traders pointed to dollar demand from at least three foreign banks keeping pressure on the rupee, even as most Asian peers rose, with the offshore Chinese yuan hitting an eight-month peak before trimming gains.
However, the Thai baht declined alongside the country’s stocks and bonds, as escalating border tensions with Cambodia unnerved investors.
India’s benchmark equity indexes, the BSE Sensex and Nifty 50, closed lower by about 0.6% each, weighed down by losses in heavyweight technology stocks.
World stocks, as measured by MSCI’s broadest gauge of global equities, rose to a record high on the back of optimism about a trade deal between the U.S. and Europe, following an agreement between the U.S. and Japan. More immediately, though, the focus was on the European Central Bank’s monetary policy decision due later in the day. The central bank looks set to hit pause after seven straight rate cuts. Comments about strength in the euro will also be in focus, given the currency’s sharp run-up of over 13% against the dollar this year. The euro was last quoted at 1.1750 per U.S. dollar, a tad lower on the day.
“We are expecting the ECB to repeat the message from the June policy meeting that the stronger euro continues to pose downside risks to growth alongside higher tariffs,” MUFG said in a note.
