Indian Rupee: Gains In Early Trades As Dollar Weakens Overseas

The Indian rupee added gains against the dollar in early trades on Thursday, 14 June 2018 after the American currency weakened overseas. The dollar turned weak against other currencies overseas after the US Federal Reserve lifted interest rates projected four hikes in 2018, rather than three. Fresh selling of the greenback by banks and exporters also supported the rupee.

The domestic currency appreciated by 8 paise to 67.57 against the dollar in early trades today and dipped to a low of 67.6250 so far during the day. In the spot currency market, the Indian unit was last seen trading at 67.6150. Yesterday, the domestic unit ended 16 paise down to close at a near one-week low of 67.65 against the US currency on sustained dollar demand.

Domestic stocks edged lower in early trade tracking negative Asian stocks after the US Federal Reserve struck a hawkish tone in its latest policy statement. At 9:25 IST, the barometer index, the S&P BSE Sensex, was down 90.35 points or 0.25% at 35,648.81. The Nifty 50 index was down 32 points or 0.29% at 10,824.70. Overseas, Asian stocks followed US equities lower as the Federal Reserve struck a hawkish tone in its latest policy statement. US stock benchmarks ended near session lows yesterday, 13 June 2018 as the Federal Reserve completed its second increase to benchmark interest rates in 2018, as expected, but signaled a slightly more aggressive plan to tighten monetary policy this year than had previously been projected.

The Federal Reserve voted to raise its benchmark federal-funds rate by a quarter percentage point to a range of 1.75% to 2%. Policymakers also projected a slightly faster pace of rate increases in the coming months, with two additional hikes expected by the end of this year, compared to one previously. They see another three rate increases next year, a pace unchanged from their previous forecast.

Meanwhile, the U.S. dollar index decreased against most other major currencies in late trading on Wednesday, even though the Federal Reserve raised short-term interest rates by a quarter of a percentage point. The dollar index, which measures the greenback against six major peers, was down 0.16 percent at 93.670 in late trading.