What’s going on here?
Despite a holiday break for Indian markets, the rupee maintained its value as US bond yields spiked following strong economic data.
What does this mean?
The Indian rupee held steady at 83.95 against the US dollar as of 10:30 a.m. IST, virtually unchanged from its previous close of 83.9475. This resilience came amid a backdrop where most Asian currencies dipped between 0.1% to 0.3%. A surge in US retail sales – the highest in 1.5 years – coupled with a decline in new unemployment claims, bolstered US bond yields and the dollar. Consequently, expectations for a 50 basis point rate cut by the Federal Reserve in September dropped sharply to 29% from 55%, casting a shadow on significant monetary easing.
Why should I care?
For markets: Holding the line amidst volatility.
While US Treasury yields and the dollar rallied on strong economic data, the rupee found support from mild dollar sales by two major US banks. The…
