US dollar correction cannot support rupee, India's high oil prices drag down local currency

The correction in the dollar failed to support the Indian rupee, which came under pressure against the dollar on Thursday, despite both the dollar and oil prices falling. The U.S. consumer price index (CPI) growth is expected to slow in July, and market concerns about the Federal Reserve's recent interest rate hike have eased, putting pressure on the U.S. dollar. Analysts at Brown Brothers Harriman Bank pointed out that the latest U.S. inflation data has prompted a moderate dovish shift in interest rate expectations, although the overall rise in the dollar continues. They emphasized that U.S. July CPI data showed inflation was cooling, and federal funds futures cut their September interest rate hike bets from about 50% to 35%. Economies like India, which rely heavily on oil imports, often perform poorly in high-oil prices environments.