Rupee crashes past ₹86 against US dollar as strong jobs data fuels Fed rate fears

The Indian rupee (INR) plummeted past the ₹86 mark against the US dollar on Monday, hitting an all-time low as stronger-than-expected US jobs data fueled concerns over potential delays in interest rate cuts by the Federal Reserve. The currency opened at ₹86.2, weaker than its previous close of ₹85.97 on Friday, marking its third consecutive day of decline.

The US dollar index surged to 109.97 on Friday, its highest level since November 2022, reflecting the greenback’s strength against six major global currencies. The rally was driven by robust US employment figures, which showed an unexpected rise in job creation and higher one-year inflation expectations.

According to the US Labour Department, employers added 256,000 jobs in the last month, significantly surpassing the forecast of 160,000 from economists polled by Reuters. Additionally, the unemployment rate dipped to 4.1%, underscoring the resilience of the US labour market.

According to analysts, strong employment data could lead to a shift in the Federal Reserve’s focus back to inflation control, easing concerns over economic slowdown but dampening hopes for near-term rate cuts.

Adding to global market pressures, crude oil futures surged to $81.49 per barrel in Asian trade, the highest since October 2024, as fresh US sanctions on Russian oil exports worsened supply concerns.

Since January 2024, the rupee has depreciated by nearly 3.89% against the US dollar, sliding from ₹83.12 to ₹86.35 in January 2025.