The Rupee finished the day unchanged at 85.64 against the US Dollar, due to cautious behavior in the currency market caused by various factors from around the world and at home. There were fluctuations during the day, but the Rupee remained unchanged, showing traders are holding off for the moment since the current economy leaves their plans uncertain.
Globally, rising US 10-year Treasury yields are making it tougher for emerging market currencies like the Rupee. Yields are up mainly because people are concerned about out-of-control debt in America. Rising borrowing expenses are causing investors to pull away from risky investments and seek out safer options.
The cautious sentiment was also heightened by comments from Federal Reserve official Raphael Bostic. The Head of the St. Louis Fed said that consumer financial health in the U.S. is playing a role in financial concerns and that a rocky market for Treasuries could further complicate the Fed’s plans.
Although these factors pushed against it, the US Dollar Index showed small signs of weakness because of weak budgeting and a softer economic trend in the US. Because of the US dollar’s limited strength, the Rupee did not lose much further value.
Some experts say the Rupee’s resistance right now may not last long, as its future direction largely depends on data from the US economy, global political events, and decisions from the Reserve Bank of India.
Beginning soon, traders are advised to watch key financial markets, as global bond yields, oil prices, and capital flow will influence the charts between the rupee and USD. For the time being, the balance in the currency market is uncertain.
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