The Indian rupee slipped 14 paise in the opening deals on Thursday as Federal Open Market Committee (FOMC) held the interest rates steady at its first policy meeting. “As expected, FOMC kept interest rates unchanged at 1.5-1.75% and gave a positive picture of the US economy. However, Powell expressed concern over the inability to get inflation to the 2% level and the fact that coronavirus can be the new risk on the horizon. This led to a safe-haven demand in the dollar index and we saw a gap up opening in USD/INR spot,” Rahul Gupta, Head of Research – Currency, Emkay Global Financial Services said. At 11 AM, the rupee was trading at 71.44 a dollar, down 18 paise or 0.26 per cent against the previous closing of 71.25 a dollar. On a year-to-date (YTD) basis, the Indian rupee has strengthened 0.09 per cent.
“If the rapid spread of the virus becomes a global emergency then we can see USD/INR spot to rallying towards 71.80/72.00 zone. Meanwhile, we have the Union Budget this weekend, ahead of which spot may remain on an edge,” Rahul Gupta said. The head of the US central bank pointed to continued moderate economic growth and a strong job market.
On Thursday, the National Health Commission of China said the total number of confirmed deaths from the coronavirus in the country climbed to 170 as of late Wednesday and the number of infected patients rose to 7,711, as per the Reuters news report.
Back home, the domestic equity benchmarks were trading over half a per cent lower in the early deals. S&P BSE Sensex slipped below 41,000-mark to trade at 40,960 points, while broader Nifty 50 index was ruling at 12,054 points.