MUMBAI: The Indian rupee is expected to open higher against the US dollar on Monday, helped by a decline in oil prices, which also lifted its Asian peers.
The non-deliverable forwards indicate that the rupee will open at 82.70-82.75, compared with 82.83 in the previous session. The rupee is likely to see a quiet week with a range of 82.40-82.90 playing out, a trader at a Mumbai-based bank said.
The Fed minutes is likely the most important data point this week alongside the moves in the US yields, he said.
The minutes of the Federal Reserve’s last meeting will be released during US trading hours on Thursday. Since the last meeting when the Fed opted for a smaller 25 basis points rate hike, expectations of the terminal rate have been priced higher.
A series of data points, including the US monthly jobs report, consumer and wholesale inflation and retail sales, have prompted investors to price in a peak rate of 5.30% in the cycle, about 35 to 40 bps higher than two weeks ago.
“The Feb Fed minutes are largely stale but could still hold some nuggets for the market to work with,” Chris Weston, head research at Melbourne-based Pepperstone Group, said.
US near maturity yields have jumped with the 2-year last week reaching its highest level since November. US markets are shut Monday.
Asian currencies managed to begin the week on a slightly positive note following last week’s selloff.
Indian rupee poised to weaken after dollar jump on hawkish Fed
The rupee did fall last week, but managed to fare better than its Asian on likely intervention by the Reserve Bank of India. The dollar index was hovering 104.
Apart from the minutes, a couple of Fed speakers are set to speak this week.
Oil prices fell about 2.5% on Friday, extending its weekly decline to near 4%.
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