The Indian rupee traded flat against the dollar on Wednesday. The dollar index remained firm amid a hawkish Federal Reserve and expectations around Donald Trump’s potential second term as U.S. President.
On January 01, 2025, the Indian rupee traded at 85.55 to the U.S. dollar, up nearly 0.3% on the first trading day of the year against 85.61 at the previous close yesterday. The currency fell by 2.8% in 2024, marking its seventh consecutive year of decline.
Most regional currencies were weaker, as several markets were closed for the New Year holiday, while the dollar index remained near its highest point in more than 2 years. The Dollar index stood at 108.4.
The US Federal Open Market Committee (FOMC) which decides on the US monetary policy will give its interest rate decision on January 29, 2025. Traders closely monitor these rate changes, as short-term interest rates play a key role in currency valuation.
As per news reports, the expectation that the Fed will maintain higher interest rates for an extended period, along with anticipated policies from U.S. President-elect Donald Trump, has strengthened the dollar and U.S. bond yields.
Brent crude oil futures increased by 1.1% to $74.83 per barrel as of January 1, 2025. Meanwhile, NSDL data revealed that foreign investors sold Indian shares worth a net $187.1 million and Indian bonds valued at $125.3 million on December 30, 2024.
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