Rupee gained ground on the dollar just below two-decade peak
The rupee gained some ground against a dollar, which held steady near a two-decade high versus major peers on Tuesday, even as investors braced for a slew of interest rate hikes from major central banks meeting this week, with the first salvo coming from Sweden.
Bloomberg quoted the rupee last changing hands at 79.7563, compared to Monday’s close of 79.7725, even as the dollar index, which compares the performance of the greenback against six other major currencies, rose 0.128 per cent to 109.680.
PTI reported that the rupee gained 6 paise to close provisionally at 79.75 against the US dollar.
Global stocks remained tensed as investors anticipated the Federal Reserve to hike interest rates into a recession. The US central bank’s strongest tightening cycle in a generation is expected to push Treasury two-year rates above 4 per cent for the first time since 2007.
“We are seeing clear signs that central banks are not about to ‘blink’ and are prepared to tolerate recession if that is the price they need to pay to bring inflation under control, and this means higher short-end yields, globally,” Andrew Ticehurst, a Rates Strategist at Nomura in Sydney, told Bloomberg.
Nomura and the UCLA Anderson School of Management are alone in forecasting a 100 basis-point increase. Such a move “would likely be more than enough to put the US two-year above 4% in the short term,” Mr Ticehurst said.
Those expectations have kept dollar bulls interested and made the greenback more attractive.
