Rupee opens higher after Fed cuts rates1 min read . Updated: 31 Oct 2019, 09:32 AM IST
- The Indian unit opened at 70.78 against the US dollar
- Traders await fresh cues on progress in the US-China trade talks
Mumbai: The Indian rupee on Thursday opened higher against the US dollar tracking gains in its Asian peers after the Federal Reserve cut interest rates as expected to boost economic growth. Gains in local equity markets also lifted sentiment.
At 9.10 am, the domestic currency was trading at 70.77 a dollar, up 0.18% from Wednesday's close of 70.90. The Indian unit opened at 70.78 a dollar.
The US Federal Reserve lowered its key overnight lending rate by a quarter of a percentage point to a target range of between 1.50% and 1.75%. The central bank however signaled there would be no further reductions unless the economy takes a turn for the worse.
Traders also await fresh cues on progress in the US-China trade talks.
CR Forex Advisors expects the rupee to remain range bound and trade between 70.50 and 71.50.
The yield on the 10-year Indian government bond was at 6.477% compared with its previous close of 6.495%.
At 9.20 am, the benchmark Sensex rose 0.44% to 40,225.82 points while Nifty gained 0.43% to 11895.65 points. Year to date, it has gained 11.04%. On Wednesday, the benchmark Sensex reclaimed the 40,000-mark for the first time since 5 July. The 30-share BSE Sensex is just 260 points shy of its record 40,312.07 touched on 4 June, while the Nifty is only 258.95 points away from its all-time high of 12,103.05 hit on 3 June.
In the year so far, the rupee has weakened 1.6%, while foreign investors have bought nearly $8.87 billion in Indian equities and $4.47 billion in debt.
Asian currencies were trading higher. South Korean won was up 0.62%, Philippines peso 0.34%, China renminbi 0.15%, Indonesian rupiah
0.14%, Japanese yen 0.14%, Singapore dollar 0.11%, Taiwan dollar 0.11%, Thai Baht 0.11%, China Offshore 0.08%, Malaysian ringgit 0.07%.
The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 97.322, down 0.33% from its previous close of 97.646.
(Bloomberg contributed this story)