Dollar Softens; Rupee Nears Record Low in FX Today

The forex session turned decisively dollar-negative as rate-cut expectations for the Federal Reserve firmed, pushing the greenback lower across major pairs. At the same time, India’s rupee slipped toward its record trough, keeping traders on alert for potential central bank support around a key round number.

Fed Cut Bets Pull the Dollar Lower

Why the Dollar Weakened

Traders increased wagers on a Federal Reserve rate cut next month, leaving the U.S. dollar softer into month-end. The dollar index is on track for a sizable August decline, reflecting easier yield expectations and firmer risk appetite across major currencies.

How Majors Responded

• Euro and Australian dollar extended gains as U.S. yields eased.
• Safe-haven demand for the dollar faded, favoring higher-beta currencies.
• Focus turns to incoming U.S. data to validate the rate-cut trajectory already embedded in prices.

Rupee Edges Toward a Record Low

Key Levels in Focus

USD/INR traded close to the prior all-time low near 87.95, with spot action frequently gravitating toward the 88.00 handle. Regional currency softness and trade policy worries added to pressure on the rupee.

What INR Traders Are Watching

• Potential Reserve Bank of India smoothing near the 88.00 area to temper volatility.
• Liquidity conditions in onshore markets as corporates hedge and month-end flows settle.
• Any fresh trade or tariff headlines that could shift capital flows and risk sentiment.

Quick Takeaways

• Major theme: Softer dollar as rate-cut bets for the Fed build.
• Single-currency mover: Rupee near record low; 88.00 is the intervention-sensitive zone.
• Bias: Broad dollar pressure remains unless incoming U.S. data push back on dovish pricing.