Mumbai: The indian rupee closed on Friday, recording its worst week in nine, dragged by a stronger dollar on the back of a hawkish US Federal Reserve And there is hope for a breakthrough in US debt ceiling talks.
The rupee closed at 82.66 against the US dollar as compared to closing of 82.60 in the previous session. The local currency hit its lowest level since March 16 at 82.8010 earlier in the session.
For the week, the rupee closed down 0.6%.
Hopes of a deal on the US debt ceiling pushed the dollar index to an 8-week high this week, and the index has gained nearly 2% over the past two weeks.
Attributing the strength to the dollar, Anindya Banerjee, head of research, FX and interest rates, Kotak Securities, said, “The rupee’s performance has been completely in line with other currencies.”
“US economic data has not been as bad as expected and has been revised irrigatedki trick,” Banerjee said.
Confirming the Fed’s hawkish views, two policymakers said Thursday that US inflation is not cooling fast enough for the central bank to halt its interest-rate hike cycle.
Meanwhile, the number of Americans filing new jobless claims declined more than expected last week, suggesting a resilient labor market.
“It is difficult to discount the dollar’s bullish momentum now, as we also think that some significant squeezing of USD short positions could be behind the move,” ING analysts said in a note.
ING said a US debt-ceiling deal could be announced later, but it appears most of the price has been settled as of now.
The rupee closed at 82.66 against the US dollar as compared to closing of 82.60 in the previous session. The local currency hit its lowest level since March 16 at 82.8010 earlier in the session.
For the week, the rupee closed down 0.6%.
Hopes of a deal on the US debt ceiling pushed the dollar index to an 8-week high this week, and the index has gained nearly 2% over the past two weeks.
Attributing the strength to the dollar, Anindya Banerjee, head of research, FX and interest rates, Kotak Securities, said, “The rupee’s performance has been completely in line with other currencies.”
“US economic data has not been as bad as expected and has been revised irrigatedki trick,” Banerjee said.
Confirming the Fed’s hawkish views, two policymakers said Thursday that US inflation is not cooling fast enough for the central bank to halt its interest-rate hike cycle.
Meanwhile, the number of Americans filing new jobless claims declined more than expected last week, suggesting a resilient labor market.
“It is difficult to discount the dollar’s bullish momentum now, as we also think that some significant squeezing of USD short positions could be behind the move,” ING analysts said in a note.
ING said a US debt-ceiling deal could be announced later, but it appears most of the price has been settled as of now.