• Indian Rupee may face challenges following the risk aversion sentiment over a potential slowdown in the US economy.
• Traders expect potential RBI interventions to prevent the INR from falling below the 84.00 mark.
• The US Dollar remains stable as Friday’s US labor data reduce the odds of an aggressive Fed rate cut in September.

The Indian Rupee (INR) extends its gains for the second successive session against the US Dollar (USD) on Monday. However, the USD/INR pair might experience appreciation in the near term due to a broader decline in Asian equities and currencies, driven by increasing concerns over a potential slowdown in the US economy.

Last week, the Reserve Bank of India (RBI) likely intervened multiple times to support the Indian Rupee. Traders are likely watching for potential RBI interventions to prevent the INR from falling below the 84.00 mark. Additionally, rising Oil prices could exert pressure on the INR, given that India is the world’s third-largest Oil consumer and importer.

The downside of the USD/INR pair could be restrained as the US Dollar receives support as Friday’s US labor data reduce the likelihood of an aggressive interest rate cut by the Federal Reserve (Fed) at its September meeting. The US Nonfarm Payrolls (NFP) added 142,000 jobs in August, below the forecast of 160,000 but an improvement from July’s downwardly revised figure of 89,000.