Rupee Gains To 75.816 Per US Dollar Even After Fed's Hawkish Call: Here's Why

Rupee in trade on March 17, 2022 opened on a strong note at 76.02 from the previous close of 76.19 per US dollar. During the day, it moved to day's high of 75.816 while its day high has been 76.065.

The gains in the rupee have come off even as the Federal Reserve in its meeting announced a 25 basis point rate hike and even betted on further six hikes through the year 2022 to tackle inflation.

Rupee Gains: Fed's optimistic view on the economy, Ukraine-Russia peace talks and rally in global stocks

The Fed has ushered into increasing the borrowing cost which has been maintained at zero level since the pandemic broke. But on the economy's outlook commented that "The economy no longer needs - or wants - this very highly accommodative stance," Jerome H. Powell, the Fed chair, said during his post-meeting news conference.

Also, another factors supportive of the rupee are surge in equities, developments around Russia-Ukraine crisis as there is seen a risk-on sentiment with drive for assets in riskier emerging economies including India.

Traders all in all are of the view that the Fed's stance is not overly hawkish given the fact that inflation in the world's most developed economy is at 40-year high.

Also, the crude prices have softened from the recent highs of $140 per barrel to now $101.2 per bbl for brent crude. India imports most of its crude requirement and any price hardening of the same negatively impacts rupee.