The rupee (INR) suffered sharp losses against the US dollar (USD) today, falling by 37 paise to 65.65 against the greenback. In global currency markets, the dollar continued to gain strength against other major global currencies amid strong US economic data. The rupee had ended 22 paise higher at 65.28 against the dollar on Friday on sustained unwinding of the American currency by exporters. The strong US economic data bolstered expectations of a Fed rate hike later this year. The rupee pared some early losses to close at 65.49/dollar today.
- USD climbs to its highest since mid-August against major currencies
- US dollar gains amid strong US economic data
- US data bolstered expectations of a Fed rate hike later in 2017
1) US manufacturing surged on strong gains in new orders and raw material prices, while rebounding construction spending in August bolstered the economic outlook even as hurricanes Harvey and Irma are expected to dent third-quarter growth. The Institute for Supply Management (ISM) said its index of US factory activity rose to 60.8 last month, the highest reading since May 2004, from 58.8 in August.
2) The dollar today rose versus the yen and climbed to its highest since mid-August against a basket of major currencies, extending gains from the previous session when it rose on higher U.S. Treasury yields and strong manufacturing data.
3) Forex advisory firm IFA Global expects USD-INR pair to trade between 65.40-65.80 today.
4) A higher opening in domestic equity markets kept the rupee's losses in check. The Sensex rose nearly 300 points in early trade. Forex market was shut on Monday for Gandhi Jayanti.
5) A higher dollar and strong US treasury yields pushed down global gold prices to nearly 7-week low early today.