Indian rupee has declined by 21 paise to 88.43 against the US dollar in early trade on Thursday due to the renewed strength of the American currency after Federal Reserve chairman Jerome Powell hinted out that it is not guaranteed whether it will cut rate in the month of December. The remarks of Powell created a negative effect on investors leading to an increase in the US currency and putting pressure on the emerging market currencies such as rupee.
The rupee started the day at the interbank foreign exchange market slightly at a disadvantage of 88.37 and fell further to 88.43 to the greenback as compared to its position on Wednesday of the last trading day when it was at 88.22.
Forex traders blamed the overpowering of the US dollar index to 99.05 and an increase in the US 10 year Treasury yield to 4.07 per cent, despite the Federal Reserve declaring a 25 basis points rate cut overnight, to the rupee. The shift marked the beginning that even though the Fed is lowering the monetary policy, it is concerned about the inflation and as a result, the rate cuts in the coming months are not expected to be aggressive.
In the meantime, the world oil benchmark, Brent crude, was at USD 64.75 per barrel futures at a slight positive change, which was not much of a relief to the rupee.
The domestic macroeconomic signs and international indicators now are being looked up by the market players to give fresh directions. Analysts observed that long-term inflows of foreign funds and reduction in the price of oil may provide a one-time relief, but the overall mood is conservative during the time of uncertainty in the global economy.
In another statement, which drew a lot of response in the political arena, US President Donald Trump indicated on Wednesday that he greatly admired Indian Prime Minister Narendra Modi and that there was a lot in the offing between the two nations, which continued the process of enhancing the strategic and economic relationship between New Delhi and Washington.
Click Here for Chhattisgarh News
Click Here for Entertainment News