MUMBAI, Oct 29 (Reuters) - The Indian rupee rebounded after hitting its weakest level in two weeks and ended nearly unchanged on Thursday, as likely intervention by the central bank and softer oil prices offset dollar demand, traders said.
The rupee ended at 95.26 against the dollar, barely changed from its close at 95.22 in the previous session.
It had declined to its weakest level since October 12 earlier in the session, pressured by clustered dollar demand at the Reserve Bank of India's daily reference rate alongside a pickup in interbank appetite to take on short rupee wagers.
Likely intervention by the Reserve Bank of India capped the losses and, as the flow-linked demand faded towards the end of the session, the rupee found comfort in softer oil prices, traders said.
Oil prices fell as hopes for peace talks took the edge off renewed concerns over Middle East supply disruptions from escalating regional conflict.
US Vice President JD Vance sought to revive peace negotiations by sending a letter to Iranian Security Council chief Mohsen Rezaei, the Wall Street Journal said on Wednesday, citing US officials and people familiar with the matter.
The retreat in oil prices also soothed Indian equities and bonds with the benchmark Nifty 50 ending up by about 1% while the yield on the 10-year benchmark bond eased 8 bps to 7.35%.
Elsewhere, shares traded erratically in Asia as AI-related earnings announcements prompted wildly mixed responses, raising the stakes for Amazon and Intel results due later in the day.
The dollar index was up 0.1% at 102.26, while Asian currencies rose between 0.1% and 0.3%
The focus later in the day will be on the release of US personal consumption expenditure inflation data for cues on the future path of interest rates.
"We expect September core PCE at 0.3% MoM, in line with consensus and reinforcing the message of a hot inflation environment. We expect a modest positive dollar reaction to today’s numbers," ING said in a note.
Reporting by Jaspreet Kalra; Editing by Ronojoy Mazumdar and Jochelle Mendonca
Source: Reuters