Tuesday, January 31, 2023

Rupee ends 23 paise below Fed policy announcement

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The Indian rupee ended 23 paise lower at 79.98 as most traders were previously in risk-averse mode fed policy announcement, dealers said.

In the interbank foreign exchange market, the rupee ended at 79.98 versus 79.75 on the previous trading session against the US dollar.

“The rupee closed at a record low following broad strength in the dollar and a risk-averse mood. The dollar appreciated against major currencies ahead of an expected rate hike by the Federal Reserve and because Russia’s escalation of war diminished investors’ risk appetite,” said Dilip ParmarResearch Analyst on HDFC Securities.

Parmar added that with a third rate hike of 75 basis points widely expected by the Federal Open Market Committee, some investors have moved on to an even bigger price hike.

“The focus will be on the Fed’s forecast of growth, inflation and end rates. The bias remains upward. USDINR could play in a range of 79.50 to 80.30 in the near term,” said Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities. Ltd.

Market participants were nervous after the Russian president Vladimir Putin announced a “partial mobilization” of troops in Ukraine.

The dollar index, which measures the dollar’s strength against the basket of six major currencies, stood at 110,347.

The price of Brent crude was $93.12 a barrel at the close of Indian market hours.

Meanwhile, benchmark indices ended lower on Wednesday as most investors remained cautious ahead of the US Federal Reserve’s announcement of policy, dealers said.

Sensex finished 262.96 points or 0.44 percent lower at 59,456.78, while useful closed 97.90 points or 0.55 percent at 17,718.35.


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