Merchant, arbitrage flows extend rupee's losing streak even as dollar slumps

The Indian rupee ended at 95.3925 against the dollar, down 0.1% from its previous close, extending its losing streak to about 1% over the last four sessions. Despite RBI intervention via state-run banks selling dollars and supportive factors like foreign inflows and lower crude prices, merchant and arbitrage demand kept the rupee under pressure, with traders warning of a move toward 95.80-96.00 on negative cues. Markets are eyeing the US June non-farm payrolls report, with rate futures pricing in a 67% probability of a 25 basis point Fed rate hike in September.