Rupee depreciates 3 paise against US dollar ahead of Fed outcome
The domestic currency had snapped a three-day losing on Monday by closing 10 paise higher at 66.52 on the back of fag-end dollar selling by banks and exporters.
By ET Online | Updated:
NEW DELHI: The rupee depreciated 3 paise to 66.55 against the US dollar in early trade on Wednesday ahead of the outcome of two-day Fed policy meet later in the day.
The domestic currency had snapped a three-day losing on Monday by closing 10 paise higher at 66.52 on the back of fag-end dollar selling by banks and exporters.
“Emerging markets have seen some sort of inflows in recent times as dollar strengthening has stopped or the dollar has actually receded from 99 levels to 95 levels. Going ahead, I think with inflation differential narrowing, the fundamental weakness risk of rupee is coming down. The base case scenario is 2-3 per cent depreciation in this year and you might end up in the 68-69 zone,” said Akhil Mittal, Senior Fund Manager, Tata Mutual Fund.
That said, “if you see on the trade side, the monthly closing below 66.90 places the rupee in a very sweet spot. It may appreciate further from here and go up to 65. That is purely on the trade side, more to be judged on how FOMC statement comes out and how the Bank of Japan’s meet pans out,”Mittal said.
The dollar index, which tracks the movement of greenback against a basket of six major world currencies, fell 0.12 per cent to 94.46.
Most Asian currencies were trading mixed. The Malaysian ringgit, the Korean won and the Singapore dollar edged higher, while the Chinese yuan inched lower.
The domestic currency had snapped a three-day losing on Monday by closing 10 paise higher at 66.52 on the back of fag-end dollar selling by banks and exporters.
“Emerging markets have seen some sort of inflows in recent times as dollar strengthening has stopped or the dollar has actually receded from 99 levels to 95 levels. Going ahead, I think with inflation differential narrowing, the fundamental weakness risk of rupee is coming down. The base case scenario is 2-3 per cent depreciation in this year and you might end up in the 68-69 zone,” said Akhil Mittal, Senior Fund Manager, Tata Mutual Fund.
That said, “if you see on the trade side, the monthly closing below 66.90 places the rupee in a very sweet spot. It may appreciate further from here and go up to 65. That is purely on the trade side, more to be judged on how FOMC statement comes out and how the Bank of Japan’s meet pans out,”Mittal said.
The dollar index, which tracks the movement of greenback against a basket of six major world currencies, fell 0.12 per cent to 94.46.
Most Asian currencies were trading mixed. The Malaysian ringgit, the Korean won and the Singapore dollar edged higher, while the Chinese yuan inched lower.
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