Rupee drops to 88.41 against US dollar
The Indian rupee dropped by 20 paise to open at 88.41 against the US dollar on Thursday, mainly because the US Federal Reserve signaled that a December rate cut is not assured.
This made the dollar stronger and pushed up US Treasury yields, putting pressure on Asian currencies—including the rupee—even though the Reserve Bank of India stepped in to help.
Fed's rate cut stance strengthens dollar, pushes up US Treasury yields
Fed Chair Jerome Powell's comments lowered chances of a December rate cut from over 90% to about two-thirds, which bumped up the dollar index by 0.4%.
Another Fed official also spoke against cutting rates soon, making investors more cautious.
Still, some big banks like ING and Goldman Sachs think a rate cut could happen if inflation stays soft and job numbers remain weak.
The rupee's ups and downs really show how global news can hit your wallet back home.