logo

Indian Rupee Weakens Past 86 on Fed Hawkishness

Indian Rupee Weakens Past 86 on Fed Hawkishness

Indian Rupee Hits All-Time Low Against USD

The Indian rupee is set to weaken further, breaking past the 86 level against the U.S. dollar. This decline follows a robust U.S. jobs report that bolstered the Federal Reserve’s hawkish outlook. According to the one-month non-deliverable forward, the rupee will open at 86.10-86.12, marking an all-time low compared to the previous session's 85.9650.

U.S. Jobs Data Boosts Bearish Sentiment

In December, U.S. employers added 256,000 jobs, far exceeding the 160,000 predicted by economists. Additionally, the unemployment rate dropped unexpectedly to 4.1%. For traders already holding bearish bets on the rupee, these figures provide another compelling reason to continue. A currency trader noted that while the rupee has absorbed many negative factors, a correction could be overdue.

Fed Outlook Dampens Rate Cut Expectations

Morgan Stanley highlighted that the strong labor market report shifts the focus back to inflation. This reduces the likelihood of immediate rate cuts by the Federal Reserve. Interest rate futures show market participants expect only one rate cut this year. The Fed's decision to cut rates thrice last year now appears unlikely to be repeated soon.

U.S. Dollar and Yields Strengthen Further

The dollar index surged to a two-year high of nearly 110 on Friday. Simultaneously, the 10-year U.S. Treasury yield climbed to a 14-month high. These factors continue to support the dollar, alongside anticipation of new tariffs under President-elect Donald Trump.

Key Market Indicators to Watch

Several indicators signal further pressure on the rupee. The one-month rupee forward is at 86.34, while the onshore forward premium remains at 23.50 paise. Brent crude prices also rose 1.5% to $81 per barrel, and foreign investors sold $818.5 million worth of Indian shares on January 9.

Stay informed about the latest Forex trading news and analysis about Indian rupee weakens by visiting our website: Discover more insights here.

Indian Rupee Weakens Past 86 on Fed Hawkishness

The Indian rupee weakens past 86/USD as robust U.S. jobs data solidify the Federal Reserve's hawkish stance. Learn more!

Forex Trading Broker Banner

Superior trade execution & trading conditions with the NDD method.

DANIEL JOHN GRADY
Author

Daniel John Grady is a financial analyst and writer. He is a former CFO with a degree in Financial Management and has been published in both English and Spanish. With over ten years of equities trading experience, he is primarily interested in foreign exchange and emerging markets with a focus on Latin America.

You Might Be like also
Comment (0)
Show more

Post Your Comment

user
user
email
Best Trading App Open Your Account Now!!!

The online FX industry provides a platform for investors worldwide to engage in the buying and selling. 

Newsletter Subscription

Subscribe to our daily newsletter and get the best forex trading information and markets status updates

Stay With Us
Currency Exchange
1.00 USD = 0.67 GBP
Best Trading App Open Your Account Now!
Best Trading App Open Your Account Now!
FIXIO Blog
FIXIO Home Home FIXIO Deposit Deposit
FIXIO Promotion Promotion FIXIO Support FAQ
Telegram WhatsApp Instagram X X (Twitter)
-->