Rupee Rises 35 Paise To 82.46 As Dollar Weakens On Easing US Inflation

Rupee Today: Domestic currency gains sharply against a softer dollar

The rupee gained sharply on Wednesday, stalling a two-day losing streak as the dollar took a significant hit overnight due to lower-than-expected US inflation figures, which fueled expectations the Federal Reserve would follow a slower rate hike path.

Bloomberg showed the rupee was last at 82.4587 per dollar, gaining significantly compared to its previous close of 82.8062 on Tuesday.

According to PTI, the domestic currency rose 15 paise to close provisionally at 82.45 against the US dollar.

“The Indian Rupee opened lower at 82.60 per dollar and weakened further to 82.70 before recovering to 82.44 as inflows from a stake buy of a commercial Bank helped the domestic mark a high of 82.40,” said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors.

“Asian currencies were all up against the dollar, and the USDINR pair has to do all the catching up,” he added.

According to data released on Tuesday, US consumer prices eased to the lowest in 15 months in November, falling short of expectations for a second consecutive month.

Following that data, the dollar index, which compares the value of the greenback to six major currencies, hit a six-month low of 103.57 overnight and was stable at around 104 on Wednesday.

As the anticipation of high and increasing US interest rates, which fueled dollar gains, has started to fade, the US currency is down 9 per cent since reaching a 20-year high in September.

The deceleration in CPI inflation supports the case for the FOMC to taper the increase in the Funds rate to 50 basis points, Carol Kong, a Currency Strategist at the Commonwealth Bank of Australia (CBA), told Reuters.

“We expect FOMC Chair Powell at his press conference to talk about the risks to economic growth as well as the need to bring inflation down to target,” Kong said, noting the focus on economic growth will likely be welcomed by risk assets and pull the dollar lower.