Rupee opens gap up this morning at 87.83 levels, after DXY tested multi month low of 96.7 and down about 1 on the week. Markets widely expect a 25bps Fed rate cut, with markets pricing in close to 67bps of easing by year-end, supported by cooling labor market signals despite resilient retail sales.

Euro has rallied to a four-year high breaching 1.1850 levels, while sterling slipped to 1.3640 as market awaited UK August CPI data, expected to show headline inflation edging up to 3.9 but core softening, just ahead of Thursday’s BoE meeting where rates are likely to stay on hold. The Japanese yen eased to 146.6 after weak trade data, though it remained near two-month highs as a softer dollar limited losses.