The Indian rupee is expected to continue its decline following the release of the U.S. Federal Reserve’s June meeting minutes, which indicated the likelihood of more rate hikes this year, Reuters reports.
Impact of Fed’s Decision
Non-deliverable forwards suggest the rupee will open at around 82.30 to the U.S. dollar, compared to 82.2250 in the previous session. The rupee slipped below 82.20 on July 5, a near-term support level, due to dollar buying by public sector banks, likely for the Reserve Bank of India, and by oil companies.
Market Reactions
The dollar index rose, U.S. yields increased, and equities pulled back after the Fed minutes showed officials favoring additional rate hikes. While the Fed paused at the June meeting, the minutes revealed that some members could have supported a 25 basis points increase, and almost all participants judged additional rate increases later this year would be appropriate.
Asian Market and Future Predictions
Most Asian currencies were down 0.2% to 0.4%. The two-year Treasury yield rose to 4.9630% in Asia, near the highest since March. Market watchers are now looking to U.S. private payroll data and the ISM services print for further cues on the labor market.
Read Also: US Stocks Slip, Treasury Yields Rise Ahead Of Fed Minutes: What’s Driving Markets Wednesday?
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