Forex
Home›Forex›Major Pairs›Rupee rebounds as US yields fall and USD/INR nears 95.…
Rupee rebounds as US yields fall and USD/INR nears 95.62
USD/INR slips toward 95.62 as 30-year Treasury yields fall to about 5.18%, following a Treasury plan to raise the maximum size of long-dated buyback operations to at least $4 billion per trade.
The Indian rupee snapped a three-day losing streak against the US dollar on Thursday, with USD/INR correcting to near 95.62 as the dollar weakened.
FXStreet links the move to a sharp drop in long-dated US bond yields, noting 30-year Treasury yields are down almost 2% from Tuesday’s close to around 5.18%, while 10-year yields were holding losses near 4.64%.
The US Treasury Department said it plans to double the maximum size of its liquidity-support buyback operations for longer-dated nominal securities. The current cap of $2 billion per operation is expected to increase to at least $4 billion per operation, aiming to curb a sharp rise in borrowing costs.
FXStreet also points to Fed expectations staying broadly steady, citing CME FedWatch showing a 67% chance the Fed leaves policy rates unchanged in September. Strategists at OCBC caution that the rupee may struggle to build on the dollar pullback amid elevated oil prices and importer dollar demand.