USD/INR REMAINS STABLE DUE TO RISING LIKELIHOOD OF RBI INTERVENTION

• The Indian Rupee maintains its position as traders expect RBI to intervene to support the domestic currency.
• The USD/INR pair could appreciate if Asian markets experience a decline due to rising concerns about the US economy.
• The US Dollar receives support due to rising doubts on the scale of the Fed rate cut in September.

The Indian Rupee (INR) holds steady against the US Dollar (USD) on Tuesday, with traders speculating that the Reserve Bank of India (RBI) likely intervened in the foreign exchange market to support the domestic currency and prevent it from weakening beyond the 84.00 level.

The USD/INR pair could appreciate in the near term as a broader decline in Asian equities and currencies emerges, fueled by rising concerns about a potential slowdown in the US economy. However, lower Oil prices may help ease downward pressure on the INR, as India, being the world's third-largest oil consumer and importer, stands to benefit from reduced import costs.

The US Dollar appreciates due to the reduced likelihood of an aggressive interest rate cut by the Federal Reserve (Fed) at its September meeting. According to the CME FedWatch Tool, the likelihood of a 50 bps rate cut has slightly decreased to 29.0%, down from 30.0% a week ago.