Indian Rupee remains weak amid mounting geopolitical tensions

"Mild weakness in the dollar will not lead to any major appreciation in the rupee because the RBI will look to replenish its foreign exchange reserves, but if the dollar index moves 2-3% lower, we may see half a per cent of move (in the rupee)," noted Nitin Agarwal, head of treasury at ANZ India.

Foreign Portfolio Investment (FPI) inflows into India are estimated to remain positive in FY25, with an expected inflow of USD 20-25 billion, according to the Bank of Baroda.

Markets have pared bets for a 25 basis points (bps) interest-rate cut at the December meeting to less than 59%, down from 76.8% a month ago, according to the CME FedWatch Tool.

The US Building Permits declined by 0.6% from 1.425 million to 1.416 million in October. Meanwhile, Housing Starts fell by 3.1% from 1.353 million to 1.311 million during the same period. 

Kansas City Fed President Jeffrey Schmid said it remains uncertain how far interest rates can fall, but the recent cuts by the Fed indicate confidence that inflation is heading toward its 2% target.