A rebound in the U.S. dollar index above 100 could trigger outflows from emerging markets, with Elara Capital warning of a potential reversal in fund flows.
Experts said that the domestic currency is likely to trade in the range of 85.25 to 86.25 against the US dollar in next few months as geopolitical tensions wanes
Dollar index, which measures the American currency against a basket of currencies, fell to 96.734 in the early morning trade, as compared to 96.875 in the previous trading session.
The latest headlines on Powell add another element of risk to the dollar and US Treasuries, which are both already under pressure from uncertainties around the impact of tariffs and a ballooning fiscal deficit.
Donald Trump's comments on replacing Fed chief Jerome Powell saw the dollar index falling to over three and half years' low of 97.31
The dollar index, which measures the greenback's strength against a basket of six major currencies, found support as US consumer confidence imporved
Easing tariff tensions which prompted Trump to say that talks with India were "going great," and the possibility that the two nations could soon reach a deal have helped the local currency.
So far in this month, dollar index is down around 6 percent. Today, the dollar index is trading lowest since March 31, 2022, when it was at 98.312.
The dollar index fell to 101.53, its against lowest level since October 1, on fears of potential recession in the United States coupled with rising inflation
The dollar index, which measure American currency's value against six major global peers, rose to 106.621 in the early trade
According to the Bloomberg data, the Indian rupee has depreciated to 87.2025 against the US dollar as on February 26, as compared to 83.8213 on October 3, 2024.
The dollar index, which tracks the American currency's value against six major currencies, eased to 107.742 in early trade
Trump's initial tariffs on China, Mexico, and Canada sent the dollar index soaring. With China being the world's largest importer of metals, concerns over a potential trade war weighed on sentiment for Indian metal companies.
The local currency ended at 86.5500 against the dollar compared to the previous day's close of 86.3625
Acharya’s comments come at a time when markets await clarity on whether new RBI Governor Sanjay Malhotra would continue with his predecessor’s approach of intervening firmly in the currency market.
Experts don't rule out the possibility of Indian Rupee touching 85 against USD. On December 4, Indian rupee ended record low on growth worries. Indian rupee ended 84.74 against the U.S. dollar, its lifetime closing low, down from 84.6850 in the previous session.
The October FPI selloff had led to Nifty's worst monthly fall since the pandemic. Uday Kotak said his larger point was if the stock markets are resilient enough to face such a shock, and that the country must get competitive on global trade.
In the last four days, the Indian rupee has been hitting record lows due to outflows from the equities, a strong dollar index, and other cues. Indian rupee today stood at 84.3600.
The dollar index was last up 0.048% at 104.27, after rising to 104.690. It has had a turbulent week, falling from a five-month high to a two-week low after an unexpected slowdown in U.S. services growth supported expectations of Fed rate cuts.
The dollar had weakened in recent days in line with falling Treasury yields, even after Fed Chair Jerome Powell on Wednesday said that a March rate cut was unlikely.
The headline Consumer Price Index rose 0.3% last month, for an annual gain of 3.4%. That was expected to be 0.2% and 3.2%, respectively.
The dollar index touched its lowest since mid-August, making bullion less expensive for overseas buyers.
Analysts believe a trend reversal in bond yields and the dollar would prove to be beneficial for emerging markets like India amid strong corporate earnings growth
Israel Palestine issue: As geopolitical uncertainty following Hamas surprise attack on Israel intensifies, the flight to safety in government securities and dollars could be on the rise, said analysts
Finance Minister Shunichi Suzuki said on Thursday that Japan would not rule out any options if there was any excessive volatility in currency moves, warning against speculative yen moves amid the currency’s fall.