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The rupee rebounded 25 paise to 68.33 against the US dollar in early trade Thursday, in tandem with other emerging market currencies after Federal Reserve chief Jerome Powell bolstered expectations of a rate cut later this month. However, rising crude oil prices capped the gains. At the interbank foreign exchange market, the domestic unit opened on a firm footing at 68.31, but soon pared some gains to trade at 68.33, up 25 paise over its previous close.
The rupee had declined by 7 paise to close at 68.58 against the US dollar Wednesday, pressured by persistent foreign fund outflows and firming crude oil prices. US Federal Reserve Chair Jerome Powell told a congressional committee Wednesday that flagging global growth and trade tensions continue to weigh on the US economic outlook and the central bank is ready to "act as appropriate" to boost growth. Investors are wagering on a rate cut by the Fed as early as this month.