Rupee Today: Domestic currency falls against the dollarThe rupee sagged with the dollar on Thursday after the Federal Reserve took a hawkish stance and projected higher for longer interest rates despite cooling inflation, which weighed on risk assets.Bloomberg showed the rupee was last at 82.6225 per dollar in early trade, compared to its previous close of 82.4587.On the back of the Asian cues and higher oil prices, the rupee should be on the defensive at the open but remains “well protected” near the 82.75 levels, said a trader at a Mumbai-based bank.PTI reported that the domestic currency declined 15 paise to 82.64 against the US dollar in early trade. Asian currencies, too, were lower.”Two consecutive undershoots of (US) inflation have led the market to believe we are getting very close to the peak for interest rates, and rate cuts will soon be on the agenda,” noted analysts at ING Bank.The Federal Reserve raised interest rates by half a percentage point on Thursday. However, the dollar still suffered as investors questioned the extent to which the central bank would commit to slowing down the economy in its fight against cooling inflation.Although Fed Chair Powell’s speech initially gave the dollar a boost, it later gave back some of those gains as markets thought about the dimming growth prospects in the biggest economy in the world.”The Fed does not want financial conditions to ease, but increasingly investors are saying: we hear what you are saying, and we know what you want, but we don’t believe you,” Christian Hoffmann, Portfolio Manager and Managing Director at Santa Fe, New Mexico-based Thornburg Investment Management, told Reuters.The market’s scepticism that the Fed might not raise rates as far as it has planned is fueled by the notion that inflation has probably peaked.”We doubt that the funds rate will be kept at that restrictive level for that long, and I think markets, in the reaction, probably support that view as well,” Carol Kong, a Currency Strategist at Commonwealth Bank of Australia, told Reuters.”The US economy is going to deteriorate and probably contract modestly next year, and that will, in turn, encourage the FOMC to reverse course later next year.” Featured Video Of The DayWhat Market Watchers Say About China Unrest And The Global Impact
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