Lower than expected consumer inflation, and the government's remarks on extending support to the rupee had the stock markets rallying. The rupee rose against the dollar, as did most other Asian currencies. Stock market sentiment was also helped by the US and Chinese governments preparing for another round of trade talks, which investors hope will scale down the threat of more tariffs. 

Analysts however, think that the rupee has not yet found its natural bottom, with the US Federal Reserve likely to raise interest rates again in its September 25-26th meetng. US growth has been on track, and US inflation is stable, giving the US Fed room to raise its benchmark rate this month from its current range between 1.75% and 2%. And if the trade war between the US and China doesn't aggravate, the Fed may raise its rates again. This means that even government support and RBI intervention may not halt the slide of the rupee as US money returns home.

Underlying issues - such as India's rising trade deficits - persist, and it will require a strong earnings quarter and consistent low inflation to restore some bounce to the rupee. Oil prices will also be a big factor, and something investors will have to keep an eye on this as hurricane season in the US makes supplies more unpredictable, and as Iran sanctions take effect.