Fed Decision Leaves Rupee in Uncertainty, Oil Prices Keep Pressure

The Federal Reserve's decision to hold interest rates steady has left currency traders guessing and India's rupee treading water near 95.62 per US dollar.

Normally, a straightforward Fed decision would be clear-cut, but the message was messy: policymakers signaled they still want inflation lower while avoiding a clear path for future moves.

This uncertainty briefly pushed the US dollar lower and left global currency traders recalibrating, with longer-term US borrowing costs rising as 30-year Treasury yields hit their highest level since 2007.

In India, the noise showed up more in the 'forward' market than in the spot rate. The 1-year dollar-rupee forward implied yield slipped 3 basis points to 2.84%, making it slightly cheaper to lock in dollars for a payment due next year.