USD/INR rises on Fed-triggered US dollar rally: How long could it last?
|The USDINR pair made a gap up opening at 75.18 levels and traded in the range of 75.07-75.30 with an upside bias. The pair finally closed at 75.07 levels. The RBI set the reference rate at 75.1724. The USDINR pair rose because the US dollar surged against major currencies after the US Fed indicated an interest rate hike in March at its two-day policy meeting outcome. The USDINR pair also rose because some banks persistently purchased the US dollar for oil marketing companies, noting elevated Brent crude oil prices.
Prices of Brent crude oil surged and were near the $90-a-barrel mark, driven by tight supply and rising geopolitical tensions between Russia and Ukraine. The sentiment for the domestic currency was dampened due to a sharp fall in domestic and Asian benchmark equity indices that weakened after the Fed concluded its policy meeting with an indication on raising interest rates. Germany’s GfK consumer sentiment index came in at -6.7 points heading into February from a revised -6.9 points a month ago, exceeding average analyst expectations for a drop to -7.8.
China's industrial firms saw December profits grow at their slowest pace in more than a year and a half, pointing to cooling demand amid mounting economic challenges for the world's second-largest economy. U.S. economic growth likely accelerated in the fourth quarter as businesses replenished depleted inventories to meet strong demand for goods, helping the nation to log its best performance in nearly four decades in 2021.
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