Rupee Strengthens Against The U.S. Dollar After Fed Hikes Rates By A Quarter Point

The rupee appreciated against the U.S. dollar.

The local currency appreciated 15 paise to open at 81.68 against the greenback on Thursday.

The rupee strengthened 3 paise to close at 81.80 against the greenback on Thursday.

It closed at 81.83 on Wednesday, as per Bloomberg data.

The yield on the 10-year bond declined about 2 bps to open at 6.98% on Thursday, the lowest open in over a year since April 8, 2022. It declined most in seven months on Wednesday to close at 7%.

The rupee is expected to gradually inch towards 81.5 on the back of a pause in U.S. interest rate hikes going forward, according to Ritesh Bhansali, vice president at Mecklai Financial Services Ltd.

The Federal Reserve raised interest rates by a quarter percentage point and hinted that it may be the final move in the most aggressive tightening campaign since the 1980s as economic risks mount.

The dollar index fell to 101.14, nearing a support level, said Anil Bhansali, head of treasury at Finrex Treasury Advisors.

The US dollar index has corrected from 102 to 101 levels over the last couple of seasons and is expected to correct further towards 100 levels going forward, Ritesh Bhansali also said. Brent oil fell to $73.29 per barrel on growing recession concerns. Asian currencies all gained after the Federal Reserve's move to signal a possible pause.

The pace of rupee appreciation will be gradual as the RBI will also try to buy dollars to build up its reserves, Ritesh Bhansali said.

"Supports for the dollar-rupee spot pair are at 81.5000 and 81.4500, and resistances are at 81.9000 and 82.0000," Reliance Securities said in a pre-market note.