INSUBCONTINENT EXCLUSIVE:
Long bets on most of Asia's emerging currencies were trimmed, a Reuters poll showedThe rupee saw its biggest single-day fall in more than
two months on Thursday while bond yields rose as the United States Federal Reserve stunned investors by signalling it might raise interest
rates as early as 2023, faster than assumed
tracking the United States benchmark bond yield which jumped 7.5 basis points."Forward guidance from the Fed proved to be more hawkish than
what the market expected," Eugene Leow, strategist at DBS wrote in a note
Traders said the surge in the dollar index to two-month highs following the Fed's comments on possible rate increases and a significantly
higher inflation projection weighed on sentiment for all Asian currencies.Long bets on most of Asia's emerging currencies were trimmed, a
Reuters poll showed on Thursday, as investors weigh the prospect of tighter monetary settings as the United States recovery outperforms,
while the COVID-19 situation locally is brought under control.Traders however believe that central bank intervention will likely stabilise
the rupee in the short-term but it would also depend on how things pan out globally
"Given the strength in the dollar, it is likely that the USD/INR could now move into a new trading range," HDFC Bank economists wrote in a
note."However, given the volatility in the market, that usually follows such events (Fed policy), we are holding off on changing our
near-term call before the market digests the news and recent dollar moves show some resilience," they said.RBI bought 400 rupees worth bonds
and state loans in its third tranche of bond purchases under the government securities acquisition programme, a form of quantitative easing,
the cut-off they have shown yet again that they want the 10-year yield to stay below six per cent," a senior trader at a foreign bank said.
