The Indian rupee weakened against the US dollar in early trade on Monday, weighed down by persistent domestic demand for dollars despite softer crude oil prices. This weakness was also driven by expectations that the US Federal Reserve could keep interest rates higher for longer. Investors are cautiously awaiting the minutes of the Federal Reserve’s June policy meeting and the upcoming US inflation report for fresh clues on the outlook for interest rates. Meanwhile, the RBI said India's forex reserves dropped $5.654 billion to $666.933 billion during the week ended June 26. However, fresh foreign fund inflows supported rupee sentiments and limited further falls. Foreign institutional investors turned net buyers, purchasing equities worth Rs 1,355.33 crore on a net basis on Friday, exchange data showed.
The partially convertible currency is currently trading at 95.40, weaker by 22 paise from its previous close of 95.18 on Friday. The currency touched a high and low of 95.4250 and 95.22 respectively.
