The rupee recovers to 81.54 a dollar from Monday’s close of 81.88
The rupee recovered to gain sharply against the dollar on Tuesday from near record lows in the previous session, following Britain’s decision to make a U-turn on its tax-cut proposal and slightly lower expectations for strong central bank action after data showed aggressive rate hikes have started to reflect on the global economy.
According to Bloomberg, the rupee was changing hands at 81.54 per dollar after opening at 81.65, compared to its previous close of 81.88, and well below its record low of 81.95 against the greenback.
PTI showed the rupee rose 30 paise to settle provisionally at 81.52 against the US dollar.
As the euro and the pound advanced and Treasury yields decreased due to a change in investor expectations for the direction of US interest rates, the dollar fell against a basket of major currencies.
US benchmark 10-year rates decreased on Monday by about 20 basis points to about 3.6 per cent after peaking at 4.0 per cent just last week.
“Noticeably, that move lower was entirely driven by a fall in real yields, with inflation breakevens moving higher on the day, which is again a sign that investors are pricing in a much less aggressive reaction from the Fed,” Deutsche Bank strategist Jim Reid said in a daily note, reported Reuters.
Other indicators of market stress are still flashing red, suggesting wild gyrations in global financial markets, especially in currency trades.
“More volatility is almost certainly assured as FX markets re-focus on US recession risks, which continue to build,” Miles Workman, Senior Economist at ANZ, told Reuters referring to US jobs data on Friday the next major data point on the horizon.
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