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Indian rupee opens weaker as US yields rise and FIIs sell
USD/INR climbed to near 96.43, its highest level in more than two months, as 10-year US Treasury yields moved up to around 5.32%.
The Indian rupee opened lower versus the US dollar on Tuesday, FXStreet said, pressured by a continued rise in global bond yields. The USD/INR pair rose to near 96.43, the highest level seen in over two months.
FXStreet linked the move to higher US rates, noting that 10-year Treasury yields were up 0.24% to around 5.32, after reaching a fresh two-decade high near 5.35 on Monday. The outlet said the broader risk-off environment that often follows higher yields can reduce demand for riskier currencies like the INR.
The report also pointed to foreign outflows weighing on the rupee, citing continuous selling by foreign institutional investors from the Indian stock market. It said FIIs offloaded holdings worth Rs. 14,183.36 crore in the first two trading days of October.
FXStreet added that fears around persistent global inflationary pressures, tied to energy supply shocks related to the Middle East war, are supporting the advance in US Treasury yields.
To close, the outlet said US Treasury yields seemed to keep rising even after soft September US nonfarm payrolls data led traders to dial back how hawkish the Federal Reserve might be.