Indian rupee started Thursday on the front foot against the US dollar after the US Federal Reserve’s decision to hold its key interest rate constant “for the sixth time” in a row from last year. The rupee kicked off with a 2-paise gain today, setting the level at 83.42 to the previous close of Rs 83.44 on Tuesday.
The Federal Open Market Committee (FOMC) opted unanimously to retain the key interest rate at 5.25–5.5% in May, highlighting the expansion of economic activity alongside moderate but persistent inflation, as per a statement released on Wednesday evening. This decision, coupled with cautious remarks from Fed Chair Jerome Powell, led to a decline in the US Dollar Index.
Shinhan Bank vice president underlined that in the April jobs report, the US economy resumed its impressive growth, with the unemployment rate declining to a new level. Brent crude prices are dropping significantly, resulting in US investors’ attention being placed on the nonfarm payrolls stats for Friday.
Sodhani highlighted two important levels for USD/INR, 83.35 and 83.55, respectively, with 83.55 being a resistance argument for the selling party.
On the whole, the market shows favourable macro-indicators for the Indian rupee in light of the Fed’s careful approach towards interest rates and the outlook for the US economy. With each passing day, investors keep an eagle eye on the economic indicators, including NFP report, the currency and the dollar exchange rates are a focal point of debate for traders and analysts alike.
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