The US Federal Reserve, for the second time in three months, increased the interest rate by 25 basis points on back of recovery in the economic growth. They have also guided for two more rate hikes in 2017.
Khoon Goh, Head of Asia Research at ANZ Research, said that the market will need to see good fiscal data and Trump’s fiscal policy plans come to fruition in order to see an up-move in US yields and dollar.
For rupee, the strength is coming from BJP’s win in the recent elections, which further boosted investor sentiments. Economic reforms are expected to continue and further inflows will come into India.