Indian Rupee rallied against the greenback after the US Federal Reserve hinted that it will halt the interest rate cuts through 2020. On the currency market, the value of Rupee continued to appreciate by 10 paise settling at 70.66 against the US dollar.
Wednesday’s trading session saw the USD/INR exchange rate fluctuate within the range of 70.89 — 70.55.
During the early Asia trading hours and after the London open, the USD/INR exchange rate was seen quoted within a tight range of 70.71 — 70.59. The dollar index, which gauges the greenback’s strength against a basket of major currencies, inched further into negative territory settling at 97.12, a 5 month low.
In other news, the US Federal Reserve kept its benchmark interest rate unchanged at 1.75% and signaled no desire to cut rates in 2020. On Wednesday, Fed Chairman indicated that they will keep an eye on the trade tension risks as well as the subdued global growth.
The GDP forecast for 2019 was projected at 2.2%, while Fed’s favorite measurement of inflation PCE was lowered to 1.6% at the end of 2019 compared with the 1.8% previous projection.
Elsewhere, the Asian Development Bank (ADB) followed the lead of the FMI and slashed its growth forecast for the Indian economy down to 5.1% versus 6.5% previous forecast for the fiscal year 2019 — 2020. At the same time, ADB also sees growth to pick up to 6.5% in response to RBI’s easing measures to boost the economy.
The downward trajectory in the GDP reading also follows the Reserve Bank of India own assessment, which revised down its GDP outlook 5.0%.
The domestic benchmark equity index NIFTY 50 closed on a positive tone during Wednesday’s trading session and settled at 11910, registering a +0.45% gain. Year-to-date the Indian stock market has gained 10.09%, benefiting from foreign investment inflow.
During early Asia trading hours, NIFTY 50 was seen gaping higher and quoted at 11977. The Indian 10-year government bond yield was seen quoted at 6.79 versus 6.76 previous closing prices.