 |
Fuelling this rebound in the rupee’s value against US dollar
is the big fall in global oil prices. Photo: Ramesh Pathania/Mint
|
New Delhi: The rupee (INR) continued its upward trend today, rising for a third day against US dollar (USD). The partially convertible rupee touched 69.85 a dollar today. This is the first time the rupee has strengthened past 70 a dollar mark in three months. Rupee had ended at 70.62 on Wednesday. The gains in the rupee comes amid a broad drop in US dollar against other currencies as well. The dollar slipped after dovish comments from US Federal Reserve Chair Jerome Powell, calming investor concerns over the pace of rate hikes. Indian equity market also rallied today with Sensex rising over 500 points.
5 things to know about rupee’s gain today:
1) This is a big turnaround for the rupee which had hit a record low of 74.48 a dollar on 11 October. Including today’s big gain, the rupee is up by about 6% against the US dollar from its record low.
2) Fuelling this rebound in the rupee’s value against US dollar is the big fall in global oil prices. On concerns of oversupply, crude prices are down by nearly a third from its four-year high of $86 a barrel, hit last month.
3) The sharp fall in crude prices has eased concerns over India’s current as well as fiscal deficit. When petrol and diesel prices had touched a record high of Rs 84 per litre in Delhi, the government had to cut excise duty to cool prices.
4) Fed chair Jerome Powell on Wednesday said that US policy rates were “just below” neutral, less than two months after saying rates were probably “a long way” from that point. The Fed has raised rates three times this year. Higher US interest rates tend to boost the dollar. The markets would now barely price in one hike for 2019 from two to three hikes earlier, says forex advisory firm IFA Global. The Fed’s new stance was “relatively constructive from pure dollar trade perspective and it could edge off the dollar and continue to do so until the year end,” said Stephen Innes, APAC trading head at OANDA in Singapore. “A weaker dollar helps other local currencies such as China and India get back in the game, which could add to gold’s lustre,” Innes added.
5) Forex traders will be also be closely watching for more clues on the Fed’s monetary tightening path from the minutes of the US central bank’s November 7-8 meeting, due later today. Also on radar will be the progress on US-China trade relations at the weekend G20 meet. Two of the main factors that drive emerging market currencies like rupee - crude and US rates - are both in the comfortable territory now, says IFA Global. “The only major global risk factor lurking is the US-China Trade relations. In that context, the Trump-Xi meet becomes extremely crucial,” it added.
Source:https://www.livemint.com/Money/T93TICibY8NQFM1UkS1iIJ/USD-INR-rupee-US-dollar-rate-today-1-dollar-rupee.html
Source:https://www.livemint.com/Money/T93TICibY8NQFM1UkS1iIJ/USD-INR-rupee-US-dollar-rate-today-1-dollar-rupee.html
EmoticonEmoticon