Weak U.S. housing data spurs hope that Fed would slow pace of raising rates
Weak U.S. housing data spurs hope that Fed would slow pace of raising rates
The rupee on Thursday strengthened by 48 paisa against the dollar on account of the U.S. currency softening against major currencies.
At the interbank foreign exchange market, the Indian unit closed at 82.33 compared with its previous close of 82.81.
“The rupee edged higher amid the decline seen in the dollar index towards a one-month low and improved risk sentiments,” said Sugandha Sachdeva, vice president, Commodities and Currency Research, Religare Broking Ltd.
“The greenback has slipped lower by around 1.5% this week on the back of wagers that the Fed might adopt a slightly less aggressive policy stance post the November meeting owing to the discouraging U.S. housing market data.”
“Weak data is indicative of the damage caused by the rising borrowing costs which might push the U.S. central bank to turn less hawkish than previously anticipated. Furthermore, renewed strength in crude oil prices is also likely to weigh on the domestic currency. Considering the variables, we foresee the Indian rupee to trade in a range of 81.80-82.80 in the near term while key support rests at the 84 mark from a medium-term perspective,” she added.
Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services, said, “Rupee rose sharply as the dollar plunged against its major crosses. Weaker-than-expected economic data from the U.S. led to retracement in the dollar.”
“Expectation is that the Federal Reserve will slow the pace of its rate hiking cycle. This sent the Euro back above parity with the greenback for the first time in a month. Pound extended its gains on optimism that Rishi Sunak and his team will restore stability and credibility in the UK,” he added.
“Today, focus will be on the ECB policy statement and expectation is that the central bank could be hawkish and extend gains for the currency. We expect the USDINR(Spot) to quote in the range of 82.10 and 82.50,” he further said.
The key equity market indices also gained on Thursday. The S&P BSE Sensex gained 213 points, or 0.36%, to 59,757 points. The NSE Nifty-50 Index also rose 81 points, or 0.46%, to 17,737 points.
