Rupee climbs with Asian peers, forward premiums stick to uptrend
MUMBAI, June 26 (Reuters) - The Indian rupee strengthened alongside regional peers on Thursday as the dollar was weighed down by concerns over the independence of the U.S. Federal Reserve and a pullback in geopolitical risk premium.
The rupee rose nearly 0.4% to 85.74 as of 11:40 a.m. IST, broadly in line with gains seen among Asian peers.
The offshore Chinese yuan was perched near its strongest level since Donald Trump's victory in the U.S. elections, while the dollar index hovered near a three-year low.
The euro and the Swiss franc climbed to multi-year highs against the greenback as investors fretted over the independence of the U.S. central bank following Trump's remarks on Chair Fed Powell.
Trump on Wednesday called Powell "terrible" for not lowering interest rates sharply.
While Powell has urged a cautious approach on policy rates, markets are now pricing a near 25% chance of a rate cut in July, up from 12% a week earlier, according to CME's FedWatch tool.
The heightened rate cut odds have also helped lift dollar-rupee forward premiums, with the one-year implied yield rising to a near one-month peak of 2.02% before paring gains.
On the day, traders pointed to broad-based interbank dollar sales, which helped lift the rupee.
FX strategists at DBS see "the scope for USD/INR to consolidate in an 84-86 range with a downside bias, aligning with its historical tendency to regain equilibrium after sharp currency movements," the firm said in a note.
The rupee had weakened to a low of 86.8925 last week as the conflict between Iran and Israel deepened, but has pared losses since a ceasefire helped cool oil prices.
Brent crude oil futures were last quoted at $67.8 per barrel, down nearly 12% on the week.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Telegraph
38 minutes ago
- Telegraph
Trump rejected invitation to Bezos wedding
Donald Trump rejected an invitation to Jeff Bezos's star-studded Venetian wedding. Mr Bezos, the tech billionaire, was reportedly trying to cosy up to the US president, in what could be seen as an attempt to fill the position of 'First Buddy' vacated by Elon Musk. The Wall Street Journal (WSJ) reported that the 61 year-old, who is preparing for his lavish three-day wedding in Venice, had spoken twice to Mr Trump in the last few weeks. As part of his charm offensive, Mr Bezos extended an invitation to his upcoming nuptials with Lauren Sanchez, the journalist. White House officials confirmed to the WSJ that the invitation had been offered. Mr Trump was not expected to attend the Venice ceremony owing to scheduling conflicts, however. Mr Trump's daughter Ivanka, a friend of Ms Sanchez' is expected to attend, along with her husband, Jared Kushner. Donald Jr, the president's eldest son, is also going. In 2019, Mr Trump mocked Mr Bezos as 'Jeff Bozo' in a dig at the Washington Post, which the billionaire owned. However, the newspaper did not support Kamala Harris in last year's presidential election, breaking a liberal tradition going back decades. In February, the Post refused to run an advert attacking the administration that asked whether Donald Trump or Elon Musk was running the country. Earlier this year, Mr Bezos abandoned plans to display how much Mr Trump's proposed tariffs were costing Amazon customers on each transaction following a direct appeal from the president. Mr Bezos, the founder of Amazon and one of the world's richest men, appears to be trying to exploit Mr Trump's spectacular falling out with Mr Musk, which started at the end of last month. Dave Limp, chief executive of Mr Bezos's space company Blue Origin, has also held talks with Susie Wiles, the White House Chief of Staff, the WSJ reported. There are powerful business reasons for Bezos's approach, notably the possibility of government contracts for Blue Origin. Until now, Elon Musk's SpaceX has dominated the market, spectacularly outstripping Blue Origin in the race to become Nasa's main contractor since the US stopped using the Russians to ferry missions to the International Space Station.
Reuters
40 minutes ago
- Reuters
Trump administration has 'no imminent plans' to refill nation's emergency oil reserve
WASHINGTON, June 26 (Reuters) - The Trump administration has no imminent plans for refilling the nation's Strategic Petroleum Reserve, White House spokeswoman Karoline Leavitt said on Thursday. The emergency oil reserve is currently at its lowest levels since the 1980s after President Joe Biden tapped the stockpile to help lower prices amid market uncertainty.
Leader Live
41 minutes ago
- Leader Live
Reynolds: Port Talbot plant does not meet US rules to get steel tariff exemption
The steel industry faces uncertainty over the US-UK trade deal finalised this month, which slashed tariffs on aerospace and auto sectors, but left levies on steel standing at 25% rather than falling to zero as originally agreed. Negotiations are ongoing to secure the outstanding tariff agreements. The executive order signed by Mr Trump suggests the US wants assurances on the supply chains for steel intended for export, as well as on the 'nature of ownership' of production facilities. Prime Minister Sir Keir Starmer has insisted the ownership structure of the British Steel plant in Scunthorpe does not need to change to complete the deal with the US. 'The issue with the implementation of the steel agreement is the melt and pour rules, which is the US interpretation of rules of origin around steel,' Mr Reynolds told reporters. He said that applies to the Port Talbot plant, where semi-finished products come into the UK and then go to the mills for processing to keep the business going. 'That doesn't meet their existing implementation of that in the US.' The British Steel plant is controlled directly by the Government, but is still owned by Chinese firm Jingye. Asked if British Steel's ownership was part of US trade talks, he said it 'comes up in the context of the US (being) very supportive of what we did' to take control of the plant. 'On British Steel, we have to resolve issues of ownership separate to issues around US trade,' he said. The ownership is something that needs to be resolved 'regardless' of the US talks. The Government plans to class Britain's steel and energy sectors as 'nationally important' to UK security under new procurement rules.
