Indian Rupee Holds Steady as US Treasury Yields Reach New Heights

The Indian Rupee has held onto its recent losses against the US Dollar, trading near its seven-week high of around 96.00 in the opening session on Wednesday.

This comes as 10-year US Treasury Yields trade 0.35% lower to near 4.98%, but remain close to their 19-year high of 5.04% posted on Tuesday.

The Reserve Bank of India (RBI) has intervened in the spot and Non-Deliverable Forwards (NDFs) markets, selling US dollars to support the currency, according to a Reuters report.

Market strategists at Deutsche Bank attribute the rise in US Treasury Yields to investors pricing in deeper Federal Reserve tightening on the back of higher inflation.

The Fed is expected to raise interest rates by 25 basis points (bps) to 3.75%-4.00% at its policy meeting, with a 92.5% probability according to the CME FedWatch tool.