The rupee could touch 85 against the US dollar on Thursday if the US Fed is slightly hawkish in its tone, says Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP.
The Indian rupee on Wednesday hit its fresh all-time low of 84.95 to a US dollar, amid greenback buying ahead of the FOMC meeting wherein the US Federal Reserve is expected to cut interest rates by 25 bps and will give future guidance.
The US Fed decision will be announced at 12.30 am Indian Standard Time (IST) tonight.
“The rupee makes an all-time low of 84.95 as the dollar buying continues, ahead of the FOMC meeting wherein the US Fed will cut rates by 25 bps and will give future guidance. The rupee could touch 85 tomorrow if the US Fed is slightly hawkish in its tone,” said Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP.
The rupee remains under pressure from both global and local factors.
Domestically, the rising trade deficit added strain on the rupee. This increase in trade deficit was driven largely by record-high gold imports in November, said CR Forex Advisors MD Amit Pabari.
India’s exports in November contracted 4.85 per cent year-on-year to $32.11 billion, while the trade deficit widened to an all-time high of $37.84 billion due to a record surge in gold imports.
The country’s gold imports in November reached a record high of $14.86 billion, registering a four-fold increase, mainly on account of festival and wedding demands, according to commerce ministry data.
Gold imports stood at $3.44 billion in November 2023.
“The USD/INR pair is expected to trade within a range of 84.50 to 85.00 in the near-term,” Pabari added.
