Rupee ends day at 64.04 against US dollar

NEW DELHI: Rupee depreciated 13 paise to settle at 64.04 against dollar on Thursday, tracking cues from the US Federal Reserve's policy statement released overnight.

Yesterday, the rupee ended the session at 63.91 against the American currency.

The two-day policy review by the US Fed concluded on Wednesday. In the statement, the Fed said that the underutilisation of labor resources has diminished since early this year and that inflation has continued to run below the Committee's longer-run objective.

This has raised chances that the US Fed may start hiking interest rates in the September policy review.

"To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 per cent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 per cent inflation," the US Fed statement said.

Dollar index, which tracks the movement of dollar against a trade-weighted basket of six major world currencies, stood at 97.23, up 0.30 per cent.

When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 per cent,the Fed statement added.

Jahagir Aziz of JPMorgan, in an interview to ET Now said, "We actually do continue to believe that the first rate hike most likely will be in September unless between now and then there is a major increase in dollar strength that is probably the only thing that could hold back of the Fed from raising rates in September."

Japanese brokerage Nomura expects the rupee to gain from from current levels to around 63.20 by late 2016, even as dollar is seen continuing its upward rally against all major currencies.