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Indian Rupee Gains 9 Paise Against US Dollar, Aided by Dovish US Fed

In early trade on Thursday, the Indian rupee rose 9 paise to 83.19 versus the US dollar (equal to 23.1 against the UAE dirham).

The Indian rupee strengthened by 9 paise to reach 83.19 against the US dollar (equivalent to 23.1 against the UAE dirham) in early trading on Thursday. 

This surge in value was attributed to the prevailing risk-on sentiments in the market following the US Federal Reserve’s somewhat dovish stance in its policy meeting.

Factors Behind Rupee’s Gains:

  • Dovish US Fed: The US Federal Reserve maintained interest rates, and its chairman expressed satisfaction with the economy’s smooth deceleration. This dovish stance contributed to a softer US dollar in international markets.
  • Weaker Dollar Abroad: A weakened US dollar in overseas markets, in part due to the Fed’s decision, had a positive impact on the Indian rupee’s performance.
  • Positive Domestic Equities: The Indian currency also received support from positive trends in domestic equities, enhancing investor confidence.

Impact on Dollar Index and Bond Yields:

The decision by the US Federal Reserve led to a softening of the dollar index, a key indicator of the Dollar’s performance against other major currencies. 

Additionally, the 10-year bond yield fell to 4.70, reflecting changing dynamics in the financial markets.

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