Rupee opens lower by 13 paise at 66.05/$

In spite of dovish policy statement from US Federal Reserve, there is a perception that Fed will initiate its first rate hike either in October or December.

Indian Rupee today opened at 66.05 against the dollar, lower by 13 paise in early trade on Wednesday. Yesterday rupee weakened against the greenback, impacted by sharp fall in domestic equity markets and strength in US dollar against the basket of currencies. In spite of dovish policy statement from US Federal Reserve, there is a perception that Fed will initiate its first rate hike either in October or December.

On the global front, the preliminary Caixin China manufacturing PMI crashed to 47.0 in September, which is a six-and-a-half-year low. The Asian Development Bank sees a softer outlook for China and India and a delayed recovery in the world’s advanced nations. Its report predicts the region’s economies will expand 5.8% this year and 6% next year, down from the 6.3% it forecast in March for both years. The Chinese economy, which grew a revised 7.3% last year, is now set to slow to 6.8% growth in 2015 and 6.7% in 2016. India is forecast to grow 7.4% in 2015 and 7.8% in 2016. With the Fed choosing to postpone its rate hike decision, the attention is again on growth in developed and emerging economies besides issues with China. Global cues are subdued. Asian markets are in the red; down around a percent. Wall Street came tumbling down again with Dow down 1% and Nasdaq shedding 1.5%. The weakening Indian currency will also be in focus today.

On Tuesday, the Indian currency ended at 65.89, weaker by 16 paise. The currency touched a high and low of 66.03 and 66.09 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.62 and for Euro stood at 73.26 on September 22, 2015. While, the RBI’s reference rate for the Yen stood at 54.50, the reference rate for the Great Britain Pound (GBP) stood at 101.7319.