MUMBAI: The Indian rupee was expected to open little changed to the US currency on Wednesday amid a spike in US yields and a flat dollar.
The rupee is seen around 82.75-82.80 per dollar in early trades versus its previous close of 82.8475.
The currency may even gain marginally at the open, tracking a subdued dollar, absent any fresh cues, with China’s steps towards reopening a positive in the background, said a foreign exchange trader.
However, an uptick in US yields could put some pressure, the dealer added, while citing limited trading activity around the holidays.
The dollar index was flat at 104.250 after China said on Monday it would scrap its COVID-19 quarantine rule for inbound travellers, even as COVID cases spike.
The rising cases are a risk, but economic reopening is eventually needed and could spur activity in China, said Sajal Gupta, head of forex and rates at Edelweiss Financial Securities.
Asian shares were surrendering Tuesday’s gains, tracking a fall in US stocks as investors were divided over China’s policy shift, while most Asian currencies declined.
Oil prices remained firm at around $84.40 in another threat to the rupee.
Coming off a holiday, benchmark US Treasury yields rose over 10 basis points overnight to hover near a five-week high of 3.86%, as investors continued to assess the Federal Reserve’s path for interest rates.
After a near three-month low, the 10-year yield has steadily climbed, with global central bank policy announcements prompting large gains till last week.
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