After a soft US inflation report revived hopes of a soft landing, the Indian rupee shot up 1.3% to 8o.71 against the US dollar on Friday. This was the Indian currency’s highest level against the greenback since September 22.
The US dollar index, which measures the strength of the American currency against a basket of six other currencies, was trading around 108 level which was its two-month low. The yield on the US 10-year Treasury note fell about 33 basis points to 3.828%, the lowest in 5 weeks.
“Treasury yields are in freefall, the dollar is tanking, and practically every risky asset is rejoicing over this inflation report,” said Edward Moya, Senior Market Analyst, OANDA.
The headline US consumer price index and the core inflation both rose less than expected in October, giving rise to bets that the Fed may be promoted to hike rates by 50 basis points in its next meeting.
Rahul Kalantri, VP Commodities, Mehta Equities,…
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