In an astonishing development, the Indian Rupee gained against the US Dollar amid the weakening of the greenback after the US Federal Reserve announced another round of measures. These measures were taken to stimulate the American economy from the effect of Coronavirus. It is to be noted that the currencies of other Asian countries were also higher against the US Dollar today.
Further, the Indian Rupee rose to 75.93 per US Dollar, is the day’s high, as compared to the closing value of the previous day at 76.29. In the session prior to this, the rupee had hit a record low of 76.32 against the US Dollar.
Cutting off the early gains, the rupee had recently attained 76.09 per US Dollar. Similarly, the stock market of India also failed to sustain early gains. Sensex rose 1% after dropping 5% earlier.
Considering the global markets, the US Dollar fell after the Fed proclaimed unlimited quantitative easing and credit market supporting schemes. The initiative pulled out all stops to supply the much-required greenback liquidity.
On the whole, the dollar index saw a dip of about 0.8%, amounting to 101.67. This indicates a further slip from Friday’s peak of 102.99—the highest since January 2017. On the other hand, the US Dollar has raised 7% against the Indian Rupee year-to-date. Most of the rupee’s fall during the month is attributable to the foreign investors for withdrawing their investments from the emerging market assets.
The volatility in the forex markets is expected to continue as per analysts. Nobody has an answer as to when the market may gain its normal rhythm. Also, the kind of damage this slowdown could cause to the global economy is out of imagination.
For any clarifications/feedback on the topic, please contact the writer at apoorva.n@cleartax.in
