Indian Rupee Tumbles as US Treasury Yields Hit 2-Decade High Near 5.3%

The Indian Rupee (INR) weakened against the US Dollar (USD) on Thursday, following an upside move the previous day. The currency faces selling pressure as the United States Treasury Yields continue to rise, with the 10-year yield hitting a two-decade high near 5.31%.

The increase in US bond yields has diminished the appeal of riskier assets, including the Indian Rupee. This is because higher yields on US bonds make them more attractive to investors, who can earn higher returns by investing in them.

Fed officials have continued to warn about persistent inflation risks due to energy supply shocks. The Federal Reserve's (Fed) policies are seen as supportive of the Dollar, despite some moderation in perceived hawkishness.