The Indian rupee dropped 21 paise to 94.58 against the US dollar on Thursday, following a hawkish surprise delivered by the US Federal Reserve.
At its latest policy meeting, Fed officials adopted a more aggressive stance than markets had anticipated, with 9 of 18 policymakers projecting at least one rate increase in 2026. This was much higher than what markets had expected, with Goldman Sachs previously estimating that only around three members would signal the need for further tightening.
The US Federal Reserve has delivered exactly the opposite of what global markets expected, mounting further pressure on the currency. However, the rupee has continued to benefit from a combination of favourable domestic and international factors.
Earlier on Wednesday, the currency touched an intraday high of 94.29 against the US dollar, its strongest level in six weeks. Since touching historic lows in the past six weeks, the rupee has strengthened nearly 1.5 per cent despite slipping to 95.70 against the US dollar at one point.
Pressure on the Indian rupee has eased after crude oil prices came down, reducing the risk of inflation and supporting economic activity in the country.
Over the last four trading sessions, the Nifty 50 has gained approximately 4 per cent, while the Sensex has advanced nearly 4.5 per cent, as investors responded positively to the improving geopolitical atmosphere in the Middle East.
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