MUMBAI: The Indian rupee is expected to open little changed on Wednesday and hold a narrow range, as traders monitor the Chinese yuan for cues amid China-US trade developments and keep an eye on flows.
The 1-month non-deliverable forward indicated an open in the 85.58-85.62 range, versus the close of 85.6025 in the previous session.
The rupee’s intraday range over the last two sessions has been limited to just about 20 paisa, underscoring how volatility has subsided.
Interbank dealers have broadly pegged the near-term range on the dollar/rupee at 85.40–85.50 to 86.00–86.10.
Mild bearish bias for Indian rupee on dollar strength; US-China talks eyed
“Within this range, which now seems increasingly entrenched, there is good two-way interest,” a currency trader at a private bank said.
“At the top end, exporters and speculators tend to step in, while at the bottom, corporates are active dollar buyers.”
The rupee’s 10-day daily realized volatility has fallen to around 3%, its lowest level in more than two months. It’s not just the rupee—volatility across most Asian currencies has declined and now sits well below recent peaks.
Receding concerns over a damaging trade war between the US and its major trading partners have helped temper volatility and boosted appetite for risk assets.
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