The rupee gained some ground against a dollar, which held steady Tuesday near a two-decade high against major competitors, even as investors braced for a slew of rate hikes from major central banks that met this week. , with the first salvo from Sweden .
Bloomberg last traded at 79.7563, compared to Monday’s closing at 79.7725, even as the dollar index, which compares the dollar’s performance to six other major currencies, rose 0.128 percent to 109.680. .
PTI reported that the rupee gained 6 paise and closed for the time being at 79.75 against the US dollar.
Global equities remained tense as investors expected the Federal Reserve to raise interest rates into a recession. The US Federal Reserve’s strongest tightening cycle in a generation is expected to push two-year Treasury yields above 4 percent for the first time since 2007.
“We’re seeing clear signs that central banks aren’t about to ‘blink’ and are willing to tolerate a recession if that’s the price they’ll have to pay to get inflation under control, and this means higher short-term yields, globally Andrew Ticehurst, a rates strategist at Nomura in Sydney, told Bloomberg.
Nomura and the UCLA Anderson School of Management are the only ones forecasting a 100 basis point increase. Such a move “would probably be more than enough to bring the two-year US above 4% in the near term,” Ticehurst said.
Those expectations have kept dollar bulls’ interest and made the dollar more attractive.