Rupee declines 35 paise against US dollar in early trade

After opening flat, the rupee slipped as much as 35 paise to hit a low of 70.05 against the US dollar in the early trade on Friday. 

The currency strengthened further by 69 paise to close at 69.70 on Thursday as the Fed raised the interest rate but lowered its projection for future hikes.

Gains in the rupee were triggered after the Federal Reserve in its policy statement mentioned that rate hike in the coming year could be restricted to two compared to earlier estimates of three rate hikes next year. 

Fed Chairman Jerome Powell said the central bank would continue trimming its balance sheet by $50 billion each month, and left open the possibility that continued strong data could force it to raise rates to the point where they

start to brake the economy’s momentum, said a Reuters report. 

Today, USD/INR pair is expected to quote in the range of 69.70 and 70.50, says Gaurang Somaiya, Research Analyst(Currency) at Motilal Oswal Financial Services. 

On the global front, Asian stocks slid in the early trade as the threat of a US government shutdown and of further hikes in US borrowing costs inflamed investor unease over the economic outlook.

Japan’s Nikkei fell 1.8 per cent, and was down more than 6 per cent for the week so far, while Australian stocks slipped 1 per cent to a two-year trough. Chinese blue chips lost 1.2 per cent, in part after the United States accused Beijing of orchestrating the hacking of government agencies and companies around the world, Reuters reported.