Us Federal Deficit

The Indian rupee may further depreciate to 82 to a dollar in the near term due to widening of trade deficit and expected aggressive rate hike by the US Federal Reserve later this week to tame record high inflation, economists said.

The rupee extended its losses on Wednesday as the dollar strengthened after Federal Reserve Governor Lael Brainard said the US central bank needs to act and take inflation head-on.

The US economy is expected to contract by double digits as unemployment surges, while the federal deficit is seen exploding to $3.7 trillion in 2020, the Congressional Budget Office said Friday.

US congressional leaders reached a two-year budget deal to raise government spending by almost $300 billion, a rare display of bipartisanship that is positive for risk sentiment but is also widening the federal deficit sharply.

After a brief overnight fall, the rupee gained ground against the dollar and ended 5 paise higher at 66.97 on improvement in trade deficit data and easing fears of rate hike by the Federal Reserve.

Currencies across the globe seem to be largely guided by actions of the US Federal Reserve, with rupee witnessing only moderate volatility, says a report by Care Ratings.

The US budget deficit fell by nearly a third during fiscal 2014 to $486 billion as federal revenues grew far faster than spending, the Congressional Budget Office said on Wednesday.

Global factors will also be key with US Federal Reserve chief Janet Yellen due to give a speech in Jackson Hole, Wyoming.

News on Tuesday that the U.S. trade deficit was at a four-year low has also bolstered optimism that the global economic outlook is improving and lifted the dollar, while a bumper Irish debt sale has boosted confidence in euro zone peripheral debt.

Surging currency reserves and the fall in the current account deficit have reassured investors about India's vulnerability to a Fed "taper", analysts said, after fears about it sent the rupee to a record low in late August.

The modest deal ends three years of partisan warfare in Congress over federal spending and taxes that fueled a 16-day government shutdown in October and twice brought the United States to the brink of default, rattling financial markets.

India's current account deficit, which narrowed in the second quarter of the current fiscal year, is likely to widen during the fiscal second half as seasonal demand bring in more imports, according to a report by global brokerage firm HSBC.

Reserve Bank of India (RBI) Governor Raghuram Rajan said on Wednesday that India is in a better position to face the US Federal Reserve's unwinding of its easy money policy whenever it takes place.

India's high current account deficit is likely to be lower than the projection of 3.8 per cent of the GDP and the country will be in a better position to neutralise the impact of the tapering of monetary stimulus by the US central Bank, the Federal Reserve, Planning Commission Deputy Chairman Montek Singh Ahluwalia has said.

The rupee fell 1.5 per cent to a record closing low on Tuesday as traders worried that the country's current account deficit made the currency especially vulnerable to any scaling back of the US Federal Reserve's monetary stimulus.

The Indian rupee may further depreciate to 82 to a dollar in the near term due to widening of trade deficit and expected aggressive rate hike by the US Federal Reserve later this week to tame record high inflation, economists said.

The rupee extended its losses on Wednesday as the dollar strengthened after Federal Reserve Governor Lael Brainard said the US central bank needs to act and take inflation head-on.

The US economy is expected to contract by double digits as unemployment surges, while the federal deficit is seen exploding to $3.7 trillion in 2020, the Congressional Budget Office said Friday.

US congressional leaders reached a two-year budget deal to raise government spending by almost $300 billion, a rare display of bipartisanship that is positive for risk sentiment but is also widening the federal deficit sharply.

After a brief overnight fall, the rupee gained ground against the dollar and ended 5 paise higher at 66.97 on improvement in trade deficit data and easing fears of rate hike by the Federal Reserve.

Currencies across the globe seem to be largely guided by actions of the US Federal Reserve, with rupee witnessing only moderate volatility, says a report by Care Ratings.

The US budget deficit fell by nearly a third during fiscal 2014 to $486 billion as federal revenues grew far faster than spending, the Congressional Budget Office said on Wednesday.

Global factors will also be key with US Federal Reserve chief Janet Yellen due to give a speech in Jackson Hole, Wyoming.

News on Tuesday that the U.S. trade deficit was at a four-year low has also bolstered optimism that the global economic outlook is improving and lifted the dollar, while a bumper Irish debt sale has boosted confidence in euro zone peripheral debt.

Surging currency reserves and the fall in the current account deficit have reassured investors about India's vulnerability to a Fed "taper", analysts said, after fears about it sent the rupee to a record low in late August.

The modest deal ends three years of partisan warfare in Congress over federal spending and taxes that fueled a 16-day government shutdown in October and twice brought the United States to the brink of default, rattling financial markets.

India's current account deficit, which narrowed in the second quarter of the current fiscal year, is likely to widen during the fiscal second half as seasonal demand bring in more imports, according to a report by global brokerage firm HSBC.

Reserve Bank of India (RBI) Governor Raghuram Rajan said on Wednesday that India is in a better position to face the US Federal Reserve's unwinding of its easy money policy whenever it takes place.

India's high current account deficit is likely to be lower than the projection of 3.8 per cent of the GDP and the country will be in a better position to neutralise the impact of the tapering of monetary stimulus by the US central Bank, the Federal Reserve, Planning Commission Deputy Chairman Montek Singh Ahluwalia has said.

The rupee fell 1.5 per cent to a record closing low on Tuesday as traders worried that the country's current account deficit made the currency especially vulnerable to any scaling back of the US Federal Reserve's monetary stimulus.