| Date: |
20-08-2015 |
| Subject: |
Rupee strengthens against US dollar |
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NEW DELHI: Rupee strengthened 11 paise to 65.16 against dollar in trade today after minutes from the US Federal Reserve's July 28-29 policy review suggest the apex bank may not hike interest rate in September.
The domestic currency had settled 4 paise higher at 65.27 against the greenback in the preceding session.
"A few participants observed that although GDP growth appeared to have picked up in recent months relative to the first-quarter pace, the level of GDP remained lower than had been projected earlier in the year. Inflation continued to run below the Committee's 2 per cent longer-run objective, partly reflecting earlier declines in energy prices and further decreases in prices of non-energy imports," said Fed in its minutes released overnight.
Minutes from the Fed monetary policy meeting also revealed that the Fed officials were in broad agreement widely agreed that the economy was nearing the point where interest rates should move higher. But they also noted lagging inflation and a weak global economy posed too big a risk to commit to 'liftoff', leading some investors to question the likelihood of a rate hike in September.
Dollar index that tracks the movement of dollar against a trade-weighted basket of six major world currencies stood at 96.38.
Meanwhile, survey by Bofa-ML showed that a total of 48 per cent of surveyed fund managers expects Fed to hike interest rate in the Setember quarter; 39 per cent expect a rate cut in the December quarter, while only 10 per cent said that it could be delayed till 2016 or later.
Any hike in interest rate in the US may stregthen dollar and could hurt emerging market currencies including ours.
Source : economictimes.indiatimes.com
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