Bonds and rupee gain; US inflation spurs hopes of dovish Fed move

Markets feel that US central bank's aggressive rate hike cycle may be nearing an end

Government bonds and the rupee strengthened sharply on Wednesday as a lower-than-expected US inflation print led to hope of the Federal Reserve adopting a less aggressive path for its future rate hikes, dealers said.

The rupee closed at 82.46 per dollar on Wednesday as against 82.81 per dollar on Tuesday. In 2022, the Indian currency has depreciated 9.8 per cent versus the US dollar.

Yield on the 10-year benchmark government fell 5 basis points to 7.22 per cent on Wednesday. Bond prices and yields move inversely. A decline of one basis point in the 10-year bond yield corresponds to a