Rupee Falls 4 Paise To 82.80 Against A Resurgent Dollar On Fed View

Rupee Today: The domestic currency falls against the dollar
Rupee Today: The domestic currency falls against the dollar

The rupee fell against a resurgent dollar in early trade on Friday, reflecting a deep sell-off in risk assets driven by the increased likelihood that interest rates would rise for an extended period after strong US economic growth data.

After opening at 82.7975 per dollar, the rupee was last trading at 82.8000 per dollar, compared to its previous close of 82.7625 on Thursday, according to Bloomberg.

At the interbank foreign exchange market, PTI reported that the domestic currency was flat at 82.79 against the US dollar in morning trade.

"The US GDP came stronger than expected at 3.2 per cent against expectations of 2.9 per cent, taking the dollar index higher. USDINR to open at 82.98 levels against a stronger dollar and remain in the range of 82.60 to 83.20," said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors.

"Exporters may now wait and watch for the RBI action at these levels, while importers are likely to keep a stop loss of 83.05 for their payables," he added.

The dollar was on the front foot on Friday after solid economic data reinforced the need for the Federal Reserve to stay on its aggressive monetary policy tightening path.

According to data on Thursday, the number of Americans submitting new claims for unemployment benefits increased less than anticipated last week, indicating that the labour market is still tight.

A separate report showed the US economy expanded in the third quarter after declining in the first half of the year and at a rate that was quicker than anticipated.

"The market continues to bounce around on thoughts of what the Fed's going to do next," Jarrod Kerr, Chief Economist at Kiwibank, told Reuters.

"The market's in an interesting predicament at the moment, sort of trying to figure out when the last rate hike is and at what level."