Rupee extends gains for fourth session, up 5 paise to 66.49 against dollar

NEW DELHI: Extending its gains to the fourth session, the rupee rose 5 paise to 66.49 against the US dollar in early trade on Wednesday after the US Fed chair Janet Yellen in an overnight speech raised doubts over Fed rate hikes in the near future.

The domestic currency had appreciated three paise to settle at 66.54 on Tuesday on persistent dollar selling of by banks and exporters. Yellen on Tuesday said the rate of inflation in the US has not yet proven sustainable against the backdrop of looming global risks to the US economy and that the US central bank should proceed cautiously to policy adjustments.

The Fed Chair , meanwhile, added that she still expected that headwinds from weak growth abroad, low oil prices and uncertainty over China would abate and allow the US recovery to continue allowing ‘gradual’ rate hikes, Reuters reported. Following the comments, most Asian currencies witnessed healthy gains against the greenback. The Malaysian ringgit climbed 0.79 per cent to 3.96 per dollar.

The Korean won and the Taiwanese dollar jumped 0.88 per cent and 0.85 per cent, respectively. The Philippine peso, the Thai baht and the Indonesian rupiah advanced 0.40 per cent, 0.28 per cent and 0.22 per cent, respectively. The Chinese yuan was up 0.31 per cent to 6.48 to a dollar. The dollar index, which tracks the movement of dollar against a basket of six major world currencies, fell 0.03 per cent to 95.13.

“If you actually look back at what Janet Yellen said, it was a very dovish message. What she is now emphasising is that the global factors play a key role in driving the US economy,” Ben Luk, Global Market Strategist, JPMorgan Asset Management.