- Indian Rupee (INR) falls after 3-days of gains
- Domestic equities rise on Fed rate cut hopes
- US Dollar (USD) rises against its major peers
- Fed leaves rates unchanged but signals 2 cuts this year
The US dollar-to-Indian rupee (USD/INR) exchange rate is rising after three days of gains. The pair fell 0.2% in the previous session, settling on Wednesday at 86.33. At 19:00 UTC USD/INR trades 0.04% higher at 86.34 and is in a range of 86.18 to 87.41.
The Indian Rupee is easing after recent gains. The move comes despite Indian shares rising for a fourth straight session, boosted by the prospect of 2 rate cuts from the Federal Reserve this year.
All 13 major sectors advanced with financials and IT stocks which see higher foreign demand leading the charge.
Lower US interest rates weaken the USD, making emerging markets, such as India, more attractive to foreign investors.
Separately, oil prices are rising, with West Texas Intermediate up almost 2% after the US issued new sanctions on Iran and as tensions in the Middle East continued to escalate.
The US sanctions targeted private Chinese refineries that are primary purchases of Iran oil.
Higher oil prices are bad news for the Indian economy, which imports over 80% of its domestic oil requirements.
The US Dollar is rising against its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is rising 0.41% on Thursday, marking a second straight day of gains.
The US dollar is rising against its major peers as investors continue to digest the Federal Reserve interest rate decision. The US Central Bank left interest rates unchanged at 4.25% to 4.5%, which is in line with expectations.
However, the Fed also slashed US growth forecasts to 1.7% and raised the inflation outlook to 2.7% owing to uncertainty about the impact of Trump’s trade tariffs. Even so, the Fed is still planning on cutting interest rates twice this year.
