The Indian rupee opened at 95.17 against the US dollar on Thursday (October 29), gaining 5 paise from Wednesday’s (October 28’s) close of 95.22, tracking gains in most Asian currencies after the US Federal Reserve’s policy decision and subsequent comments by Chair Kevin Warsh were interpreted as mildly dovish by some market participants.
The Fed kept interest rates unchanged, in line with expectations.
Two policymakers dissented in favour of a rate hike, fewer than markets had anticipated, providing a dovish surprise to some investors. The dollar index declined, while the yield on two-year US Treasuries fell.
A weaker dollar could offer some relief to the rupee, which remains under pressure from elevated crude oil prices. Brent crude was trading near $115 a barrel.
The Reserve Bank of India has also intervened in the foreign exchange market to limit the rupee’s losses. On Wednesday (October 28), the central bank sold dollars ahead of the market opening, according to the report.
Anil Bhansali, head of treasury at Finrex Treasury Advisors, said the 95.25–95.30 range remains an important resistance level for the dollar-rupee pair. A sustained break above this range could trigger further dollar buying, while continued RBI intervention could keep the pair range-bound despite underlying pressure on the rupee.
-With Reuters inputs