MUMBAI: The Indian rupee is tipped to open little changed to the dollar on Monday, with traders eyeing the trajectory of oil prices and betting that the Reserve Bank of India (RBI) may intervene to support the local currency.
The rupee is expected to open around Friday’s level of 82.35.
Last week, the unit had touched a record low of 82.6825 before recovering slightly due to likely dollar sales by the RBI.
“We reckon that 82.30 to 82.50 (to the dollar) is now the new level that the RBI is looking to defend,” a trader at a Mumbai-based bank said.
“It is obvious that the RBI has managed to nip, to an extent, the upside momentum on the dollar, and incremental long dollar positions will be added only when (we) make a new low for the rupee.”
With a relatively light US and India data calendar this week, traders could be looking at Treasury yields, the overall risk appetite, and oil prices to gauge the rupee’s direction.
Oil prices in Asia rose slightly on Monday after pulling back more than 6% last week, with Brent crude futures trading at $92.24 — off the recent peak of $98.75.
Concerns around the global economy have weighed on its prices after a recent rally due to OPEC+ supply cuts.
Treasury yields were a shade lower after climbing last week due to hotter-than-expected US inflation data.
Indian rupee almost flat after opening uptick, tipped to weaken
The 10-year yield dipped below 4% after rising for eleven straight weeks.
The dollar index was little changed at 112.98, while Asian currencies were mixed. Risk appetite in Asia was weak after US equities resumed their decline on Friday following a surprising post-US inflation rally.
Apart from the spot rupee rates, traders will also be eyeing forward premiums after they plunged last week, thanks to the RBI’s buy/sell swaps.
Comments
Comments are closed for this article.