The Indian rupee (INR) today jumped to a one-month high, supported by falling US Treasury yields and easing bets of aggressive Federal Reserve monetary action amid recession fears kept the dollar under pressure.
The rupee today opened at 78.93 and strengthened to 78.49 at day’s high, according to Bloomberg data. The rupee had closed at 79.02 in the previous session. Last month, the rupee had hit all-time low of 80.06, before pulling back. Still, the US dollar is up 5.6% against the rupee.
Global risk sentiment took a knock today with traders are bracing for US House Speaker Nancy Pelosi’s expected arrival in Taipei. Pelosi’s trip, which could raise tensions between US and China, is creating a fresh pressure point for investors already dealing with the prospects of a US recession, worldwide rate hikes and surging inflation.
“US yields have dropped on safe demand. Risk sentiment is that of caution ahead of Pelosi’s visit to Taiwan. US yields have dropped 8-14 bps across the curve with 10-year yield now at 2.53%. The dollar has weakened on lower US rates,” IFA Global said in a note.
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