Forex
Home›Forex›Major Pairs›Rupee rises as US bond yields fall and USD weakens
Rupee rises as US bond yields fall and USD weakens
USD/INR was quoted near 95.62 after 30-year Treasury yields fell toward 5.18% and the dollar index hovered near a seven-week low.
The Indian rupee strengthened against the US dollar on Thursday, snapping a three-day losing streak as the greenback weakened amid a sharp drop in long-dated US bond yields, FXStreet reported. The USD/INR pair was seen correcting to near 95.62, while the US Dollar Index, tracking the dollar versus six major currencies, was around a fresh seven-week low near 98.77.
US Treasury yields fell after the US Treasury Department said it plans to double the maximum size of its liquidity-support buyback operations for longer-dated nominal securities. The report cited a move to increase the maximum size from $2 billion per operation to at least $4 billion per operation, aiming to curb a rise in borrowing costs.
The declines were broad across maturities, with 30-year yields down nearly 2% from Tuesday’s close to around 5.18% and 10-year yields holding near Wednesday’s losses around 4.64%, according to FXStreet. Lower yields can lift demand for higher-yielding or riskier currencies, supporting the rupee.
FXStreet also linked the market backdrop to recent Fed communication, noting that the Federal Open Market Committee minutes from the July meeting reflected mixed views on whether to hike again if inflation stays high. It added that CME FedWatch showed a 67% chance of no policy change in September, and said strategists at OCBC warned the rupee may face headwinds from elevated oil prices and importer dollar demand.
Latest closeDollar index 99.64 ▼0.3%