| Date: |
18-01-2016 |
| Subject: |
Rupee opens lower against the US dollar |
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NEW DELHI: The rupee inched 1 paise lower to hover around its 28-month low at 67.60 against the US dollar in early trade on Monday. The domestic currency had dropped to a fresh 28-month low of 67.59 against the greenback on Friday.
The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, stood at 99.03. Experts said historically while the dollar has strengthened against global currencies in the pre-Fed rate hike periods, it has fallen after the start of the rate hike cycle in the US.
"In the last five cycles, the US Federal Reserve raised interest rates by 2.5 per cent per year. So a 1 per cent (expectedly rate hike) is a monetary tightening in the first gear. It is an extremely slow tightening that the Fed is proposing. And as to pushing up the dollar, when the Federal Reserve tightened rates in the three times, the dollar went up in the six months before the actual tightening happened, but it went down in the six months after," said
"So, I do not think there is any guarantee that if the Federal Reserve actually follows through with four rate hikes, we in fact do get a higher dollar. And that is not baked in at all," said David Kelly, JP Morgan Funds.
Asian currencies were, meanwhile, trading mixed. Taiwanese dollar rose 0.56 per cent against the greenback, followed by the Thai baht (up 0.12 per cent) and the Chinese yuan (up 0.07 per cent).
The Malaysian ringgit (down 0.31 per cent), the Indonesian rupiah (down 0.22 per cent) and the Japanese yen (down 0.10 per cent) fell.
Source : economictimes.indiatimes.com
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