- Indian Rupee (INR) tumbles for the fourth day
- RBI didn’t defend 80.00
- US Dollar (USD) rises to a 20 year high
- Fed hikes rates by 75 bps
The US Dollar Indian Rupee (USD/INR) exchange rate is rising on Thursday for a fourth straight session. The pair rose +0.2% yesterday, settling at 79.90, trading in a range between 79.75 to 80.07. At 15:00 UTC, USD/INR trades +1.2% at 80.99,
The Indian Rupee falls to a record low as peers across Asia also fall following the Federal Reserve’s monetary policy meeting. The Rupee suffered its single largest fall since February 24th and it remains unknown whether the Reserve Bank of India intervened in the spot market in the session.
Analysts say that they expect the Rupee to continue falling. Analysts believe that if the RBI allows the Rupee to trade above 80 on a consistent basis, 82.00 will become the next line in the sand.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at +0.5% at the time of writing at 111.19, adding to strong gains in the previous session.
The US dollar surged over 111.00 to a fresh 2 decade high as investors continue digesting the Federal Reserve’s monetary policy meeting.
The US central bank raised interest rates by 75 basis points for a third straight meeting. This was in line with expectations. However, the Federal Reserve was also more hawkish in its outlook, with interest rates expected to rise to 4.4% at the end of this year and 4.6%. This means that there is another 75 basis point hike expected in November and at least a 50 basis point in the December meeting.
Today US jobless claims came slightly above the previous week at 212k, after a downward revision to last week’s claims to 208k. The data shows that the labour market is tightening and supports the Fed’s more hawkish stance.