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India Rupee Heads To First Monthly Fall In 5 On Fed Hike Bets

28 Feb 2018 / Morning Brief

Indian Rupee

  • The Indian rupee little changed at 65.12 pair now at 65.09 against 64.87 previous close.
  • Pair to tip in 64.95- 65.30 range today.
  • The Indian rupee fell to an over three-month low against the dollar, heading to its first monthly fall in five, as the Federal Reserve chair’s upbeat assessment of the U.S. economy strengthened bets of a faster pace of rate increases this year, boosting demand for the dollar. The Indian rupee has so far lost 2.4% this month, and is set for a first monthly fall in five months as well as the steepest since January 2016.

Global Currency

  • The dollar stood near a three-week high against a basket of currencies on Wednesday, after Federal Reserve Chairman Jerome Powell's upbeat views on the economy bolstered bets on further Fed interest rate hikes this year.
  • Powell acknowledged the economy had strengthened recently, a remark that prompted investors to increase bets on four rate increases in 2018.
  • The euro held steady at $1.2230 EUR= , after briefly slipping to $1.2221 its lowest since Feb. 9. The common currency has lost momentum since hitting a three-year high of $1.2556 on Feb. 16

Global Markets

  • U.S. oil prices extended declines into a second day on Wednesday as the dollar gained and industry data showed an increase in U.S. crude and gasoline stockpiles, with surging production in the country hampering OPEC attempts to end a global glut.
  • U.S. crude stockpiles climbed last week as imports increased, while gasoline inventories climbed and distillate stocks were drawn down, industry group the American Petroleum Institute said on Tuesday.
  • Powell also noted that when formulating the monetary policy, the Fed would strike a balance between avoiding the market from overheating while achieving the 2 percent inflation target rate.

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