Rupee Rebounds Against US Dollar As Fed Holds Rate Steady On Expected Lines

The rupee rebounded against the US dollar on Thursday as the US Federal Reserve kept the federal fund rate steady at 4.25–4.5%, in line with expectations. Chair Jerome Powell said that there'll be no rush to reduce rates amid uncertainty over tariff impact.

The rupee opened 19 paise stronger at 84.64 against US Dollar. The Indian unit declined 39 paise to end at 84.83 a dollar on Wednesday, as geopolitical conflict worries increased after India destroyed nine terror bases in Pakistan.

"Rupee is expected to be in a range of 84.25/85.00 as RBI intervened yesterday to prevent major weakness. FPIs continued to be buyers of Indian stocks even yesterday, when tensions were at peak. 85.00 should be a stiff resistance to cross today," said Anil Kumar Bhansali, head, treasury and executive director, Finrex Treasury Advisors LLP.

The dollar index, which measures the strength of the greenback against six major currencies, remained strong after US Federal Open Market decision. The dollar index was trading 0.03% higher at 99.65, against Wednesday's close of 99.61.

Oil prices rebounded in Asia session on hopes that US will soon seal trade deals with major partners, subsequently bringing clarity about international trade. A rise in oil prices pressured the Indian currency.

July future contract of brent crude was trading 0.67% higher at $61.53 a barrel as of 9:10 a.m., as compared to close of $61.12 a barrel on Wednesday.