Rupee up on bets of softer Fed stance, including from Goldman Sachs

Indian rupee It opened higher against the US dollar on Monday, supported by lower treasury yields that are close to maturity amid expectations that the Federal Reserve may take a less hawkish stance on interest rates.

The rupee opened at 81.76 per dollar, up from 82.04 in the previous session.

yet failed Silicon Valley Bank, futures have almost ruled out the possibility of a 50 basis point Fed rate hike at the March 21-22 meeting. Few economists expect the US central bank to not raise interest rates at all.

“in view of recent stress in the banking system, “We no longer expect (the Fed) to raise rates at its March 22nd meeting with significant uncertainty about the path beyond March,” Goldman Sachs said in a note to clients.

The Federal Reserve, the US Treasury and the Federal Deposit Insurance Corporation (FDIC) took steps to avoid broader repercussions from the SVB collapse.

US stock futures rose 1.8% in Asian trade, the two-year Treasury yield fell 20 basis points and the dollar index fell below 104.

While the dollar is weak due to the decline in US yields, it remains to be seen if that translates to a stronger rupee given that risk aversion and safe-haven elements will be in the mix now, said Srinivas Pune, managing director at QuantArt Market Solutions. .