Indian Rupee and Thai Baht weaken nearly 1% amid higher oil prices and persistent inflation concerns, despite a softer US Dollar Index.
The Indian Rupee (INR) and Thai Baht (THB) depreciated by around 1% against the US Dollar last week, driven by a rebound in oil prices and elevated inflation risks. The Thai Baht faces additional pressure from Thailand’s deteriorating external balance and current account deficits, despite a softer US Dollar Index (DXY).
Brent crude prices climbed to approximately USD88 per barrel as geopolitical tensions in the Middle East escalated, reducing tanker traffic through the Strait of Hormuz. US gasoline prices remain elevated, while 1-year consumer inflation expectations moderated slightly to 4.2% in July from 4.6% in June, though they stay above pre-conflict levels.
US Treasury yields eased following softer June CPI and PPI data but remain above 4%, reflecting ongoing inflation concerns. The weakness in INR and THB highlights their sensitivity to oil price movements and broader inflation risks.