Five-month low reached last Friday, after US President Donald Trump struck a conciliatory tone toward China two days after threatening new tariffs. Trump on Sunday sought to calm trade tensions with China, saying Washington wants to help Beijing and not hurt it. His remarks came after he threatened to impose an additional 100% tariff on Chinese goods starting November 1, a move that had reignited fears of an escalating trade war that could weigh on global economic growth and energy demand. On the geopolitical front, Trump also declared on Sunday that the war in Gaza was over as he flew to the Middle East, where he is set to address the Israeli Knesset and co-chair a summit in Egypt on the ceasefire deal between Israel and Hamas.
The Indian rupee remained weak at around 88.7 per dollar, hovering near a lifetime low, as US policy moves continued to weigh on the currency. Market sentiment remained under pressure from the steep 50% US tariff on key Indian goods linked to measures on Russian oil imports and was further dented by tighter immigration rules. While the Reserve Bank of India has been actively intervening to curb volatility, defending the key 88.8 level, the currency is expected to face downward pressure due to hedging mismatches and foreign outflows. In addition, the central bank’s dovish remarks on potential future rate cuts in its September meeting are also weighing on the rupee. The RBA kept repo rates unchanged and the policy stance neutral, noting that subdued inflation opens policy space to support growth. Markets now await upcoming September inflation figures later today, which is expected to eased below the lower end of the RBI's 2-6% target range to 1.70%.
