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Rupee weakens To 79.90 per dollar on WednesdayThe rupee fell sharply on a widespread risk assets sell-off and a surging dollar weighing heavily on regional currencies. after strong US services data reinforced and increased the bets for aggressive Federal Reserve rate hike path.Bloomberg showed the rupee weakened to 79.8913, compared to Tuesday’ close of 79.8375.PTI said the Indian currency fell 11 paise to 79.93 against the US dollar in early trade.In yet another sign of unease, the yen dropped to a new 24-year low, the dollar spot index broke another record, and China fixed the yuan reference rate with the strongest bias ever.The US dollar surge is hurting global currencies, tightening financial conditions and fueling inflation in other economies.Data showed the US services sector unexpectedly expanded last month, supporting the idea that the economy is not in a recession and providing the Fed room to hike rates by another large 75 basis points on September 21.The US dollar index, which compares the performance of the greenback against six major currencies, rose 0.08 per cent to 110.43, close to Tuesday’s 20-year high of 110.57.”Central bankers increasingly acknowledge that the battle to bring inflation back to target will cause a recession. Late stages in economic cycles have typically been good for the dollar and bad for the pro-cyclical currency blocs such as Europe and Asia. Expect the dollar to hold onto its gains for the rest of the year and don’t rule out a further 5 per cent rally,” said Chris Turner, Global Head of Markets at ING.  

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