Indian Rupee: Firms Up In Early Trades

The Indian rupee rebounded against the dollar in early trades on Thursday, 03 May 2018 on increased selling of the greenback by exporters and banks. Weakness in the dollar against some other currencies overseas, after the US Federal Reserve reaffirmed the outlook for more rate hikes this year, supported the rupee. The Fed retained its benchmark interest rate unchanged at 1.5 per cent to 1.75 per cent last night, but noted that inflation was nearing its 2 per cent target rate after years of remaining undesirably low. The US central bank is gradually tightening credit to control inflation against the backdrop of a tight job market, a resilient economy and a pickup in consumer prices.

The domestic currency commenced at Rs 66.62 against the dollar and climbed to a high of 66.5225 so far during the day. In the spot currency market, the Indian unit was last seen trading at 66.56. The rupee yesterday ended almost steady at 66.66 against the US dollar.

Domestic stocks were trading with small losses in early trade on negative Asian stocks. At 9:26 IST, the barometer index, the S&P BSE Sensex, was down 24.51 points or 0.07% at 35,151.91. The Nifty 50 index was down 15.20 points or 0.14% at 10,702.85. Overseas, Asian stocks fell after the Federal Reserve reiterated plans to continue raising rates gradually amid firming inflation. Japan markets are closed for a four-day holiday weekend. US stocks fell yesterday, 2 May 2018 as investors assessed the US Federal Reserves signal that its in no rush to raise rates even as inflation rises to its target.

Meanwhile, the dollar slipped against the other major Asian currencies on Thursday morning after it jumped to this years new high while the Federal Reserve kept the interest rate unchanged. The U.S. dollar index that tracks the greenback against a basket of six major currencies last stood at 92.39, down 0.22%. The greenback reached this years new high overnight at 92.66, then lost its steam in the morning.