Rupee Jumps Above 71-Mark Against Dollar: 10 Things To Know
- By afternoon, the rupee touched 70.84 against the dollar, its highest level recorded since December 7.
- Tracking crude prices and the rupee, the 10-year benchmark bond yield also fell to 7.41 per cent from 7.46 per cent on Monday.
- Lower crude prices and expectations of fewer US rate hikes in 2019, as markets counted down to a crucial Federal Reserve meeting, supported the currency.
- "There is no demand for dollars because of expectations of lesser number of Fed rate hikes," news agency Reuters quoted a senior dealer at a state-run bank as saying. Most of the dollar sales were from banks, though a few exporters were also selling, dealers said.
- The Federal Reserve - the US central bank - is due to announce its rate decision after the conclusion of the two-day meeting on Wednesday. While the central bank is widely expected to raise rates this month, analysts are calling for two more hikes in 2019 compared with three in September on worries over a potential recession there, according to a Reuters poll.
- "If Fed members revise their expectations for inflation and growth lower and the dot plot for 2019 moves lower, it may initially be seen as positive by markets but it would eventually be seen as the Fed acknowledging signs of slowdown in the economy," said forex advisory firm IFA Global.
- Crude oil prices hit a 14-month low level on Tuesday. Oil prices dropped for a third session as reports of growing inventory and forecasts of record shale output in the US stoked worries about oversupply.
- "The recent announcement to restrain crude output by 1.2 million barrels a day has not affected prices which is a positive for the currency," CARE Ratings, a credit ratings agency, said in a note.
- Brent - the international benchmark for crude oil, dropped 1.2 per cent to trade below the $59-a-barrel mark. Brent has slipped more than 4 per cent in the past three sessions.
- The rupee has declined by 97 paise against the dollar so far this month.
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