The Indian rupee fell to its lowest level in two weeks, Thursday, under pressure from continued demand for the dollar and cash outflows likely linked to the repayment of outstanding debts abroad, while Indian government bonds rose supported by a decline in US Treasury bond yields and a decline in oil prices.
The rupee recorded 95.3675 against the dollar, down 0.15 percent from the previous session's close at 95.22, while the yield on the benchmark Indian bond due in 2036, with an interest rate of 6.94 percent, fell by 3 basis points to 7.4091 percent by midday. Bond yields move inversely with their prices.
Traders said limited interventions from the Reserve Bank of India helped limit rupee losses, at a time when the currency's weakness limited bond gains, along with investor caution ahead of New Delhi's issuance of bonds worth 330 billion rupees ($3.47 billion) on Friday, according to Reuters.
The rupee had risen earlier this month to its highest level in more than a month, at 94.32 against the dollar, supported by a series of regulatory measures and large inflows linked to a huge initial public offering in the local market, but its gains have begun to fade since then.
A trader at a foreign bank said that demand for the dollar is still strong, and it does not appear that it will decline soon, pointing to an increase in purchases of the US currency from clients in multiple sectors, including electronics manufacturing and jewelry trade.
In the non-deliverable futures market, a Singapore-based hedge fund trader indicated weak interest in selling the dollar against the rupee, adding that central bank interventions are the main factor pushing the exchange rate down.
The continued pressure on the rupee has increased its dependence on interventions by the Reserve Bank of India to prevent sharp movements in the exchange rate, and has also made it less responsive to global factors. Although the US Federal Reserve's decision to keep interest rates unchanged supported most Asian currencies, the rupee did not benefit from this.
Declining oil and US bond yields support Indian bonds
Support for Indian bonds came from a decline in the 10-year US Treasury bond yield, a leading indicator of global borrowing costs, by 5 basis points to 4.99 percent during Asian trading. Brent crude futures also fell by 1 percent to $114 a barrel, with concerns about supply disruption eased by hopes for progress in the peace talks.
The ten-year Indian bond yield fell below the key technical level of 7.40 percent during early trading, before rising again. Since the beginning of the week, the yield has moved between 7.41 and 7.49 percent, while traders covered their positions after it failed to exceed the 7.5 percent level.
The US Federal Reserve kept interest rates unchanged on Wednesday, as was widely expected, but indicated a continued rise in inflation, which kept expectations of an interest rate hike in December intact.
Emkay Global Financial Services said in a note that Federal Reserve Chairman Kevin Warsh explained that raising interest rates in September had begun to tighten financial and credit conditions, without describing general financial conditions as tight.
The company added that this reinforces the Reserve Bank of India's approach to responding to economic changes, and supports the justification for gradual increases in interest rates during the coming period. She pointed out that high US interest rates, high oil prices, and weak natural flows of foreign currencies are factors that call for a higher risk premium on Indian assets, which limits the ability of the Indian Central Bank to ignore the repercussions of global monetary tightening.
The Reserve Bank of India raised the repo rate and tightened its monetary policy direction earlier this month.
In the overnight index swaps market, trading was mixed, as the weakness of the rupee offset the optimism resulting from the decline in US Treasury bond yields. The one-year swap rate rose slightly to 6.6850 percent, the two-year swap rate settled at 6.74 percent, while the five-year swap rate fell by one basis point to 6.8675 percent.
Analysts at Emkay Global said that the stability of the spot exchange rate, driven by regulatory interventions and restrictions, does not necessarily mean an improvement in basic confidence in the currency, stressing that the sustainability of the rupee’s recovery will depend on whether investors reconsider their expectations in the medium term, rather than simply adjusting trading and hedging strategies.
The euro stabilized on Thursday, ahead of the European Central Bank's monetary policy decision, amid anticipation of developments in the bond crisis in France, while the dollar moved in a limited range after the US Federal Reserve reduced market expectations regarding raising interest rates next year.
The European Central Bank is expected to keep interest rates unchanged, in a decision that is not expected to come as a surprise to the markets, but it may diminish interest in the face of questions related to the financial situation in France and the future of the bank’s president, Christine Lagarde, according to Reuters.
The euro fell slightly to $1.1145, by 03:48 GMT, after rising by 0.3 percent in the previous session, following the Federal Reserve’s decision to stabilize interest rates, as was expected.
Concerns about France's ability to handle its huge debt burden have put pressure on French government bonds, and have also increased concern about other countries in the euro zone suffering from high levels of indebtedness, which has negatively affected the single European currency, which has declined by 5.1 percent against the dollar since the beginning of the year.
Weekly data issued by a US regulatory body showed that negative bets on the euro reached high levels, with the net selling positions of speculators reaching their highest level in 10 years, at a value of $18.89 billion.
Rushab Amin, investment portfolio manager in the multi-asset team at Allspring Global Investments, said that the increasing risks of stagflation intersect with financial tensions, in an economic environment that already suffers from difficulties in achieving growth.
He added that market pricing indicates that interest rates are expected to rise by a little more than two and a half times by September next year, at a time that is likely to witness a turbulent winter.
He warned that current market expectations conflict with the already high levels of bond yields around the world, in addition to the widening gap between bond yields in the Eurozone peripheral countries and their counterparts in the core economies, which may have a negative impact on growth.
Markets reduce monetary tightening bets
The US Federal Reserve decided to keep interest rates unchanged, in a vote of 10 votes to two, postponing any adjustment in borrowing costs until after the midterm elections scheduled for next week.
The decision was accompanied by a more optimistic assessment of the US economy, as the central bank indicated that economic activity was growing at a “strong pace.”
The statements of Federal Reserve Chairman Kevin Warsh, who expressed his confidence in the possibility of reducing inflation to the target level of 2 percent, without slowing growth or increasing unemployment, also contributed to pushing traders to reduce their bets on raising interest rates during the year 2027.
The dollar stabilized on Thursday, after falling from its highest level in two weeks during New York trading. The dollar index, which measures the performance of the US currency against a basket of 6 major currencies, reached 102.18 points.
In the bond market, the two-year US bond yield, which is usually affected by interest rate expectations, fell by about 7 basis points during Asian trading, reaching 4.6705 percent, continuing its decline that began after Warsh’s press conference.
Warsh also announced that the Federal Reserve will devote one of its eight meetings scheduled annually in 2027, and two meetings in 2028, to discuss the main strategic issues facing the bank, without devoting them to making decisions on monetary policy.
TD Securities analysts considered that the new schedule of meetings bears a tendency toward monetary easing, noting that allocating these meetings to discuss strategy instead of monetary policy decisions may also lead to sharper movements in the markets between meetings in the future.
The yen awaits the Bank of Japan's decision
Attention is also turning to the Bank of Japan, which concludes a two-day meeting on Friday, amid expectations that interest rates will remain unchanged.
Carol Kong, currency strategist at Commonwealth Bank of Australia, said that bank governor Kazuo Ueda was unlikely to reveal many details during the press conference following the meeting.
She added that the markets expect the bank to indicate that it has reached the target level for core inflation, and to pave the way for raising interest rates in December. She warned that failure to issue such a signal could pose a danger to the yen.
The dollar stabilized against the Japanese currency at 157.755 yen.
In New Zealand, the New Zealand dollar stabilized at 0.5622 US dollars, on Thursday, after it fell by up to 1.7 percent following the decision of the Reserve Bank of New Zealand to keep interest rates at 2.75 percent, in a move that surprised the markets.
Net profit attributable to shareholders of Riyadh Cables Group Company increased by 11.9 percent during the first nine months of 2026, to reach 913.9 million riyals ($243.7 million), compared to 817 million riyals ($217.9 million) in the same period last year, supported by the diversity of products sold, according to the preliminary financial results announced by the company on the Saudi Stock Exchange website.
The company's revenues grew during the period by 12.5 percent to 8.93 billion riyals ($2.38 billion), compared to 7.94 billion riyals ($2.12 billion) in the first nine months of 2025. The company attributed the revenue growth to the rise in prices of raw materials and the increase in quantities sold.
Operating profit increased by 12.8 percent to 1.07 billion riyals ($285.7 million), compared to about 949.8 million riyals ($253.3 million) in the same period of the previous year. Total profit also increased by 4.7 percent to 1.38 billion riyals ($367.5 million), compared to 1.32 billion riyals ($351.1 million).
In the third quarter of the year, net profit increased by 15.5 percent to 325.1 million riyals ($86.7 million), compared to 281.5 million riyals ($75.1 million) in the same quarter of 2025. It also increased by 6 percent compared to the second quarter of the current year, in which the company recorded profits amounting to 306.8 million riyals ($81.8 million).
The company's revenues in the third quarter rose by 18.2 percent year-on-year to 3.23 billion riyals ($860.9 million), compared to 2.73 billion riyals ($728.4 million) in the corresponding period last year. It also increased by 10.2 percent compared to the previous quarter.
The company attributed the growth in revenues during the third quarter to the rise in prices of raw materials, in addition to the diversity of products sold, while it attributed the increase in net profit to the diversity of products.
Operating profit in the third quarter increased by 20.6 percent to 401.8 million riyals ($107.1 million), compared to 333.2 million riyals ($88.8 million) in the same quarter of the previous year. Total profit also increased by 13.9 percent to 508.2 million riyals ($135.5 million), compared to 446.3 million riyals ($118.9 million).
The total comprehensive income attributable to the company’s shareholders amounted to 953.6 million riyals ($254.3 million) during the first nine months of the year, an increase of 8.7 percent over the same period last year, while ownership rights, after excluding non-controlling interests, rose to 3.48 billion riyals ($927.2 million), compared to 2.91 billion riyals ($775.8 million) a year ago.
Earnings per share during the period recorded 6.09 riyals, compared to 5.46 riyals in the same period in 2025.
