The rupee held its own on Friday after falling in early trading following a deep sell-off in the previous session, even as the threat of higher interest rates looms for an extended period of time amid growing global recession concerns.
Bloomberg showed that the rupee last changed hands at 82.8750 per dollar, compared to its previous close of 82.7625 on Thursday.
PTI reported that the domestic currency fell 9 paise to close for the time being at 82.85 against the US dollar.
However, falling crude oil prices dampened the rupee’s loss, forex traders told PTI.
Traders were also rightfully hesitant to bet that the rupee would fall below 83 per dollar pending intervention from the Reserve Bank of India (RBI).
“The rupee opened at 82.85 per dollar and remained in a slim range of 82.75 to 82.88. Stocks were low as oil continued to buy dollars; the RBI delivered $82.85 to calm the market,” said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisers.
“The trade range for next week is likely to be 82 to 83.50 per dollar, with risks relative to domestic currencies as we enter the holiday season when inflows will be lower and dollar buying continues,” he added.
The US Federal Reserve, the European Central Bank and the Bank of England all warned of impending rate hikes, despite the possibility of an impending recession, which negatively impacted investor sentiment towards risky assets.
Investors are concerned about longer-term growth due to the likelihood of rising short-term interest rates as evidence mounts that a global downturn is intensifying.
However, the dollar has had a turbulent week and is on course to lose 0.5 percent overall.
Ten-year Treasuries rose slightly on Thursday, but stabilized in Asia. Still, currency moves were bigger on Friday, with the dollar’s recent decline being halted by its biggest gain in two months.
“This time it wasn’t US bond yields that drove the move, it was just the sense that if the Fed’s policy remains tighter for longer… things could get tough for risky assets,” ANZ bank strategists noted. on.
“The Fed may not be walking that fast, but it still has the highest policy rate in the G10 and will be one of the few central banks to raise policy rates above 5 percent.”
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