BENGALURU: The Indian rupee ended at an over one-month low against the U.S. dollar on Friday, and logged its worst week in seven on worries that the Federal Reserve will raise interest rates more than expected this year.
The rupee ended down 0.28% at 82.74 to the dollar compared with 82.51 in the previous session, after hitting its lowest level since May 30 earlier in the session at 82.75. The currency also logged its fourth straight session of losses.
For the week, the rupee fell 0.8%, its biggest weekly decline since May 19.
Data in the U.S. bolstered the bullish undertone in the dollar index, with the rupee also depreciating amid rising demand for dollars from importers, said Jigar Trivedi, senior research analyst - currencies & commodities at Reliance Securities.
Indian rupee logs worst day in one month on hawkish Fed minutes, premiums plunge
U.S. data on Thursday showed private payrolls surged last month, while new claims for unemployment benefits increased only moderately last week, suggesting the jobs market is on solid ground and boosted bets that the interest rates will stay higher for longer.
Minutes of the Fed’s June meeting released this week showed that almost all members expected more rate hikes this year.
Traders were waiting for the U.S. non-farm payrolls data due later in the day. The dollar index was firm at around 103.03.
“The path for a more supported dollar in the near term appears to be the most obvious one, in our view, and a return above 104.00 in DXY in the coming days looks likely,” ING analysts said in a note.
Meanwhile, the rupee far forward premiums plunged to their lowest since 2009, tracking higher U.S. yields. The 1-year implied yield fell to a low of 1.53%.
Comments
Comments are closed for this article.