As the US Federal Reserve’s hawkish stance triggered a broad dollar rally, the rupee fell 12 paise to its lowest point ever, 85.06, against the US dollar in early trading on Thursday. Forex dealers reported that the US Federal Reserve had changed its 2025 forecasts, indicating a more cautious approach to monetary policy and putting pressure on developing market currencies, such as the Indian rupee.
The rupee began weakly at the interbank foreign exchange and broke through the critical 85.00 mark vs the US dollar. It dropped 12 paise from its previous close to an all-time low of 85.06 against the US dollar as a result of importers’ dollar demand, withdrawals of foreign funds, and a sluggish trend in domestic stocks, further undermining market morale.
The rupee fell 3 paise versus the US dollar on Wednesday, closing at an all-time low of 84.94. The US dollar surged ahead on a hawkish FED forecast, flirting with a two-year peak at 108.04, while the yield on US 10-year bonds increased to 4.51%, putting tremendous pressure on the rupee.
At 108.03, the dollar index, which measures the strength of the US dollar relative to a basket of six other currencies, was up 0.01 percent. Due to a rising currency and a hawkish Federal Reserve that indicated slower easing, Brent crude, the world’s benchmark for oil, dropped 0.42% to USD 73.08 a barrel in futures trading.
