The Indian rupee opened weaker against the US dollar on June 18 after a hawkish signal from the US Federal Reserve increased expectations of a potential interest rate hike later this year.
The rupee opened 16 paise lower at 94.69 against the US dollar, compared to its previous close of 94.53.
The US Federal Reserve kept interest rates unchanged at 3.5%-3.75%, extending a pause that has been in place since late 2025. The decision, which was widely anticipated by markets, came during the first policy meeting chaired by Kevin Warsh.
According to Finrex, exporters may use the higher levels to hedge receivables and could increase dollar sales around the 94.80-95.00 range. Importers, on the other hand, may wait for fresh inflows and look to buy dollars at lower levels near 94.35-94.40.
Across Asia, most currencies weakened against the US dollar amid cautious investor sentiment and continued strength in the greenback.
The South Korean Won was the biggest loser, declining 0.61%, followed by the Malaysian Ringgit at 0.58%. The Philippine Peso fell 0.34%, while the Indonesian Rupiah and Taiwan Dollar slipped 0.21% and 0.16%, respectively. The Chinese Renminbi and Japanese Yen remained relatively stable, easing 0.06% and 0.02%.
Among the few gainers, the Thai Baht rose 0.05%, while the Singapore Dollar advanced 0.03%.
The US dollar remained near a more than 2-month high as markets increased bets on additional Federal Reserve rate hikes. The stronger dollar continued to pressure the Japanese Yen, bringing it closer to levels that could trigger intervention from Japanese authorities.
In major currency markets, the euro traded slightly higher at $1.1511, while the British pound strengthened to $1.3318 after both currencies touched 2-month lows earlier.
The Australian dollar and New Zealand dollar, often viewed as risk-sensitive currencies, gained around 0.2% to $0.7025 and $0.5780, respectively.
Meanwhile, the dollar index, which tracks the US currency against a basket of major currencies including the euro and yen, remained largely unchanged at 100.31. The index had surged 0.85% in the previous session, reaching its strongest level since March 31 and recording its biggest single-day gain since March 2.
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