MUMBAI: The Indian rupee is likely to open slightly higher on Wednesday, helped by a decline in the dollar amid focus on the US presidential debate and inflation data.
The 1-month non-deliverable forward indicated the rupee will open at 83.96 to the US dollar compared with 83.9750 in the previous session.
The rupee should manage “a bit of” an uptick with the dollar on the defensive and the possible inflows related to the Bajaj Housing Finance initial public offer, a currency trader at a bank said.
“84 will remain out of reach and dips (on the dollar/rupee) will have sufficient buyers.” The dollar index dipped 0.2% to below 101.50 while Asian currencies advanced.
The focus was on the highly anticipated debate between Vice President Kamala Harris and Republican presidential candidate Donald Trump, which concluded a few minutes ago.
Investors reckon a Trump win in November would push the dollar higher.
“Presidential debates do have a history of moving polling by a couple of points,” Chris Weston, head research at broker Pepperstone said in a note.
We will have “wait to see how the relative performances impact the upcoming polls,” he said.
Indian rupee ends marginally weaker, state-run banks’ offers cap decline
Meanwhile, US inflation data due later in the day will provide cues on the pace at which the Federal Reserve is likely to cut interest rates.
Odds of a 50-basis-point rate cut next week have slipped following a US jobs report, which while below expectations was not considered weak enough for the Fed to be aggressive on slashing borrowing costs.
Headline US consumer price index is forecast to fall to 2.6% in August from 2.9%.
“Data in line with these estimates will indicate to the FOMC that inflation pressures have sustainably cooled,” ANZ Bank said in a note.
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