The rupee opened stronger at 85.10 against the US dollar on Monday (April 21), appreciating from Thursday’s (April 17’s) close of 85.37. Markets were shut on Friday (April 18) for Good Friday.
The currency’s sharp move came on the back of broad dollar weakness, triggered by growing concerns over the US Federal Reserve’s independence under President Donald Trump.
#RupeeCheck | Rupee opens at 85.10/$ vs Thursday’s close of 85.37/$ pic.twitter.com/PA38GwxzC6
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The dollar index slipped to 98.28, its lowest level in three years, after White House adviser Kevin Hassett said the administration was still exploring legal options to remove Fed Chair Jerome Powell.
This followed Trump’s remarks that Powell’s termination “cannot come fast enough” and his repeated calls for lower interest rates.
“The key thing to watch today is whether USD/INR breaks below 85 and holds,” said a currency trader at a private bank. “If it does, exporters may rush to sell dollars amid mounting pressure on the greenback.”
The rupee now hovers close to its recent peak of 84.96, touched earlier this month.
Market watchers warn that any further signs of political interference in the US central bank could fuel volatility.
Analysts at MUFG Bank noted that even talk of removing the Fed Chair could rattle global markets.
The dollar’s weakness has been compounded by worries over Trump’s trade policies, which investors fear could hurt US growth and push up inflation.
The dollar has fallen 5.5% so far this month.
As global cues weigh on the dollar, the rupee may find more room to strengthen, though gains could be capped by importer demand and RBI intervention, analysts say.
–With Reuters inputs
Content retrieved from: https://www.cnbctv18.com/market/currency/rupee-vs-dollar-inr-usd-indian-currency-rise-fall-index-april-21-us-fed-19591555.htm.
