Indian Rupee Opens Slightly Lower Against US Dollar Amid Rising US Treasury Yields

Indian Rupee Opens Slightly Lower Against US Dollar Amid Rising US Treasury Yields: Rupee’s Opening Performance

The Indian rupee commenced the trading day with a marginal decline of 2 paise against the US dollar on Thursday. This drop comes in response to a surge in US Treasury yields, triggered by indications from US Federal Reserve officials that interest rates could remain elevated for an extended period. The rupee opened at 83.09 against the US dollar, compared to its previous close of 83.07.

US Dollar Index and Treasury Yields

The US dollar index, which gauges the currency’s performance against a basket of major currencies, climbed to a six-month high of 105.68. US Treasury yields also surged, with the 2-year yield reaching 5.20% and the 10-year yield reaching 4.45%. These levels mark the highest since 2006 and 2007, respectively.

Previous Day’s Rupee Performance

On the previous trading day, the Indian rupee had managed to strengthen by 20 paise against the US dollar, closing at 83.07 per dollar. However, it had approached a record low, prompting intervention by the Reserve Bank of India (RBI) to stabilize the currency.

Indian Market Opens Lower, Responding to Wall Street Decline and Fed’s Interest Rate Decision

US Federal Reserve’s Decision

The US Federal Reserve, in its recent meeting, opted to keep the benchmark interest rates unchanged at a 22-year high range of 5.25% to 5.5%. However, the Fed signaled its intention to raise interest rates once more this year. The median dot plot in the Fed’s summary of economic projections (SEP) indicated a projection of 50 basis points of rate hikes in 2024, down from the 100 basis points projected in June.

Crude Oil Price Impact

The rupee’s losses were partially limited by a decline in crude oil prices. Benchmark Brent futures dipped by 0.67% to $92.90 per barrel, while US West Texas Intermediate (WTI) crude decreased by 1.01% to $90.28 per barrel.

Equity Market and Investment Activity

In the domestic financial landscape, the Indian benchmark equity indices, Sensex and Nifty 50, were trading lower during the pre-opening session. On the preceding day, Foreign Institutional Investors (FIIs) net sold Indian shares amounting to ₹3,110.69 crore, while Domestic Institutional Investors (DIIs) net offloaded shares worth ₹573.02 crore, according to provisional data available from the exchanges.

These market developments reflect the influence of global economic factors and investor sentiment on the Indian currency and financial markets.

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VoM News Desk

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VoM News Desk -is an online web portal in jammu Kashmir offers regional, National & global news.