Dollar weakness not driven by changing interest rates, but because capital is moving away from US assets: Report
New Delhi [India], June 28 (ANI): The recent fall in the US dollar is no longer being driven only by changing expectations around interest rates.
According to a report by Union Bank of India, the dollar's decline is now being supported by a more fundamental shift as global capital is moving away from US assets.
The report stated, 'The dollar's weakness is no longer being driven solely by shifting rate expectations; it is now being reinforced by a decisive reallocation of global capital'.
It also suggested that unless the US Federal Reserve re-establishes a clear lead in policy or US economic growth picks up speed, the report highlighted that this preference for non-US fixed income assets could continue to weigh on the dollar index (DXY) in the near term.
The report also noted that a number of Federal Reserve officials have recently made dovish comments, meaning they are leaning towards keeping interest rates steady or even lowering them. This has added to the pressure on the dollar, encouraging investors to increase short positions, bets that the dollar will continue to fall.
Earlier in the year, the dollar index had started slipping in late February, mainly due to weaker US economic data and a gradual reassessment of the Fed's interest rate path.
However, at that time, the dollar was still seeing strong support from global capital flows. For example, four-week average inflows into US equity funds were around USD 6-7 billion in late February and rose to a peak of USD 9 billion by mid-April. US bond funds also saw consistent inflows of USD 7-9 billion during this period.
As per report, this showed that the initial weakness in the dollar was more linked to interest rate expectations rather than any major shift in investor confidence. But that is changing now. With geopolitical tensions largely priced in, the future of the dollar is expected to be shaped more by domestic US factors.
The report outlined that the dollar's direction now appears to be guided less by global interest rate trends and more by shifting capital flows and local US events. (ANI)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
India Gazette
27 minutes ago
- India Gazette
FPIs make net investment of over Rs 13,000 cr into Indian stocks this week
Mumbai (Maharashtra) [India], June 28 (ANI): Foreign portfolio investors (FPIs) made a net investment of Rs 13,107.54 crore into Indian markets during the week of June 23 to June 27, according to data released by the National Securities Depository Limited (NSDL). The inflow reflects strong investor confidence in Indian equities. The data showed that FPIs made heavy investments in the Indian equity market, especially on Monday and Friday, indicating a positive shift in sentiment. With these fresh inflows, the total net investment by foreign investors in the month of June has now reached Rs 8,915 crore. This turnaround in foreign investor activity comes after geopolitical tensions between the US, Iran, and Israel eased in recent days. The easing of tensions has improved global market sentiment, encouraging foreign investors to look at emerging markets like India more positively. Additionally, strong domestic fundamentals are supporting this renewed interest. The Reserve Bank of India (RBI) recently cut interest rates by 50 basis points in its latest Monetary Policy Committee (MPC) meeting, which is expected to boost economic growth. Moreover, inflation in the Indian economy remains at a low level, further strengthening investor confidence. The combination of global stability, policy support, and strong macroeconomic indicators has made India an attractive destination for foreign investment at this time. On the domestic front, important drivers will be macroeconomic indicators, institutional buying support, and sector-specific triggers such as monsoon progress, consumption trends, and infrastructure push. These elements are expected to determine stock specific movements and FPI behaviour in the short term. Earlier in May, the net foreign portfolio investment (FPI) inflows remained in positive and stood at Rs 19,860 crore, making May the best-performing month so far this year in terms of foreign investment. The previous months' data also showed that FPIs had sold stocks worth Rs 3,973 crore in March. In January and February, they had sold equities worth Rs 78,027 crore and Rs 34,574 crore, respectively. (ANI)
Hindustan Times
36 minutes ago
- Hindustan Times
Watch: Gautam Adani and wife Priti Adani cook, serve prasad at Rath Yatra in Puri
Adani Group Chairman Gautam Adani and his wife Priti Adani visited the sacred temple town of Puri on Saturday to participate in the world-renowned Lord Jagannath Rath Yatra, which began on Friday and continues until 8 July. The nine-day festival witnessed a spiritual fervour, drawing lakhs of devotees from across India and abroad. Gautam Adani and wife Priti Adani took part in Rath Yatra and served prasad at ISKCON Kitchen in Puri.(X/ANI) (Also read: Street vendor goes viral for his uncanny resemblance to billionaire Gautam Adani) In a gesture of devotion and service, the Adani couple actively joined the 'Prasad Seva' at the ISKCON Kitchen in Puri, where they helped prepare and distribute food to pilgrims and volunteers. The Adani Group, under its ongoing philanthropic efforts, has initiated the 'Prasad Seva' programme in Puri Dham, aiming to serve both visiting devotees and frontline workers engaged in managing the massive influx of pilgrims during the Yatra. Adani seen serving devotees in viral videos Videos shared by news agency ANI showed Adani and his wife involved in preparing sacred food offerings ('prasad') and personally serving meals to people at the ISKCON Kitchen. Watch the clips here: Lakhs gather for the grand procession This year's Rath Yatra witnessed a massive influx of devotees from across India and around the world, all converging in Puri to behold the majestic chariot procession of Lord Jagannath, his elder brother Lord Balabhadra, and his sister, Goddess Subhadra. In a grand ceremonial tradition, the three deities are taken from the Jagannath Temple to the Gundicha Temple, where they stay for a week before making the return journey. The streets of Puri came alive with devotional chants, sacred rituals, and the vibrant colours of faith, creating an atmosphere charged with spiritual energy. CM Majhi welcomes devotees, urges faithful participation Odisha Chief Minister Mohan Charan Majhi also extended a warm welcome to the pilgrims, encouraging them to take part in the Yatra with full devotion. 'Join the Rath Yatra with faith and devotion, witness the divine glimpse of Mahaprabhu atop the chariot, and receive His blessings,' CM Majhi said in his message.
Time of India
an hour ago
- Time of India
AI for India summit: Experts call for stronger R&D from academia and industry; AI adoption growing across sectors
Photo credit- ANI The need to scale up research and development (R&D) across Indian academia and industry was a recurring theme at the 'AI for India' summit in Bengaluru, where leading voices in artificial intelligence stressed the urgency of cross-sectoral collaboration to make AI work at scale in India. 'This is an opportunity. R&D must step up, and this effort needs to be implemented across the industry and in academia,' said Ganesh Ramakrishnan, Professor at IIT Bombay, during a fireside chat, according to ANI. He emphasised that while industries do face challenges in adapting to disruptive changes like AI, the responsibility to scale innovation lies with both industry and academic institutions. Rishikesha Krishnan, Director of IIM Bangalore, highlighted a shift already visible in placement processes. 'This year itself, in our placement interviews, we found companies asking prospective candidates: if you have to make a digital marketing plan for the company, how will you use AI tools to do it more effectively?' he said. He added that the institute is focusing on 'co-creation,' where 'the human being and the AI work together,' rather than simply relying on generative AI tools. In a separate panel, Gourav Gupta of TVS Motors shared that the company is deploying AI across a range of functions. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Veja as oitenta mulheres mais lindas do Brasil Gloriousa Undo 'Our AI is being utilised in manufacturing efficiencies, equipment efficiencies, predictive maintenance, safety, and other areas,' he said. Gupta noted that TVS is also actively working with conversational and voice AI tools for customer service, sentiment analysis, and marketing campaigns, including a fully AI-generated ad campaign, ANI reported. 'We're using GenAI content that is very specific to consumers,' he said, underlining the potential for hyper-personalisation. On internal operations, Gupta said TVS Motors is also applying AI to employee engagement, reflecting the company's broader digital transformation strategy. Sateesh Seetharamiah, CEO of EdgeVerve, said his company has seen productivity improvements of 'close to 40 to 50 per cent' using AI. The 'AI for India' summit, organised by AI4India, seeks to establish actionable collaboration between deep tech startups, large enterprises, academia, civic bodies, and government stakeholders. ANI reported that the initiative promotes ethical research, open innovation, and capacity-building, with campaigns like DataDaan designed to ensure AI reaches every Indian. According to ANI, the summit is also showcasing cutting-edge models and technologies from leading startups such as Sarvam, BharatGen, Latlong AI, Parlaxiom, and Pienomial. Industry speakers from HDFC Bank, Tejas Networks, Sahamati Foundation, and Yotta are also participating. The ongoing discussions reflect a broader push to position India as a global hub for ethical and inclusive AI development, with institutions and industry converging to develop solutions that are both technologically advanced and socially responsible. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
