LM:Rupee rises against dollar ahead of Fed decision
Mumbai: The Indian rupee recovered from its morning lows on a firm stock market and the decline of the dollar against most global currencies ahead of the outcome of the US Federal Reserve meeting where the US central bank is expected to announce cutting its assets purchase programme.
At 2pm, the Indian rupee was trading at 63.13 a dollar after opening at 63.45. In intra-day trading, the rupee strengthened to 63.05 a dollar because of dollar buying, according to currency dealers.
BSE’s benchmark Sensex rose 50.80 points, or 0.26%, to 19,854.83 points.
The dollar index, which tracks the US currency’s strength against global major currencies, fell 0.02% to 81.1240.
“Indian rupee along with most asset classes are on a wait-and-see mode with US FOMC (Federal Open Market Committee) meeting slated for tonight,” said Anindya Banerjee, an analyst at Kotak Securities Ltd.
“In case, Fed does not change the language to dovish and does a taper between $10-15 billion, the Indian rupee could come under pressure. A range of 61.50 to 64.50 could be seen over this week,” Banerjee wrote in a note.
However, most of the analysts see rupee strengthening from the current level in the medium to long-term.
India Ratings and Research Pvt. Ltd, the domestic arm of global rating agency Fitch, said it expects the domestic currency to recover to 59-61 a dollar by the end of fiscal 2014.
According to foreign exchange dealers, the Reserve Bank of India (RBI) was largely absent from the market even as traders are not willing to take positions before the Fed meeting outcome and RBI’s own mid-quarter monetary policy review on 20 September.
The yield on the 10-year bond stood at 8.4058% against its previous close of 8.446%.
