Dollar Holds as Fed Speaks Loom; Rupee Slides Now!

Over the past 24 hours two clear FX developments set the tone for currency moves: a cautious U.S. dollar pause as markets await multiple Federal Reserve officials’ comments, and targeted pressure on the Indian rupee after a sudden rise in U.S. H‑1B visa fees. Both stories are concrete, time-stamped drivers — one influencing cross‑currency flows and yields, the other affecting a single currency via trade and capital‑flow channels.

Dollar steadies as traders await an onslaught of Fed commentary

In the last day the dollar largely held its recent gains rather than extending a sharp move. Market participants are focused on remarks from several Fed officials scheduled after the central bank’s policy pivot; traders are parsing those comments for guidance on the pace of future easing and the outlook for U.S. interest rates.

What happened

Liquidity and volatility were muted as participants scaled back directional bets and waited for clearer signals from Fed speakers. With the Fed having recently adjusted its policy stance, every public comment is being treated as fresh information that could change expectations for rate cuts and, by extension, yield differentials that support the dollar.

Why this matters for other currencies

The dollar’s near-term direction sets the backdrop for most FX moves. If Fed officials emphasize a cautious, data‑dependent approach to easing, the dollar may remain supported; if they telegraph quicker or larger cuts, yield spreads could compress and lift high‑beta currencies. For traders and institutional flows, Fed speak in the next 24–48 hours will therefore be the principal driver across EUR, JPY, GBP and EM pairs.

Rupee slips after U.S. raises H‑1B visa fees; IT sector hit

On a more localized front, the Indian rupee weakened after U.S. authorities announced a substantial hike in fees for new H‑1B visa applications. The decision prompted a selloff in Indian IT shares, which in turn reduced foreign inflows and increased dollar demand from corporates and investors.

Immediate impact

The fee jump has direct implications for India’s large IT services exporters. Market participants interpreted the move as a potential headwind to future contract wins and hiring costs in the U.S., pressuring equity sentiment and sparking FX selling into dollars. That flow, combined with typical end‑of‑day hedging and repositioning, nudged the rupee softer in the past 24 hours.

What to watch next for INR

Watch for continued equity outflows, large corporate dollar payments, and any commentary from India’s central bank or finance ministry. If IT sector weakness persists and foreign portfolio selling continues, the rupee could face further short‑term pressure; conversely, strong export receipts or Reserve Bank intervention could limit moves.

Bottom line: the dollar story is driven by macro guidance from the Fed and will dictate cross‑currency dynamics in the immediate term; the rupee move is a concrete, single‑country reaction to policy changes in the U.S. labour‑immigration sphere with clear transmission via equities and trade flows.