Rupee ends five-month low post hawkish Fed comment
Mumbai, Aug 1 (IANS) The Indian rupee fell to a five-month low while the gold lost sheen after a surprise hakwish tone of the US central bank on Thursday.
The Indian rupee weakened to Rs 69.05 from its Wednesday's close of Rs 68.79 after the US central bank stated that the rate cut was "not the beginning of a long series of rate cuts".
The precious metal also declined by half-a-per cent. At the Multi Commodity Exchange (MCX) at 20.55 IST gold expiring in August was trading at Rs 35,235 per 10 gram, down Rs 184 or 0.52 per cent. It fell to a low of Rs 35,025 per 10 gram earlier.
"Market was expecting a 25 bps rate cut and Fed delivered it. Though it was the first rate cut in a decade, it was a pre-emptive action to protect the US economy from slowing global growth and impact of the ongoing US-China trade war," said Rahul Gupta, Currency Research Head, Emkay Global Financial.
"Ideally a rate cut should have depreciated the dollar, however, the unexp ected hawkish tone of Fed led to a dollar rally. Also, the risk appetite plunged putting pressure on emerging market currencies, resulting in a gap down opening in the rupee."
Gold contract expiry in December was trading at Comex at $1427.25 per troy ounce, lower by $10.75 or 0.27 per cent from previous close.
Earlier the contract fell to $1412.25 during the Thursday's trade.
Commodity expert Ajay Kedia of Kedia Commodity said attributed the fall in gold prices to strengthening of the dollar which followed the rate cut.