MUMBAI: The Indian rupee may open slightly weaker against the US currency on Monday after the dollar index scaled a fresh two-decade high.
The rupee is likely to open at 79.84-79.86 per US dollar, compared with the previous session’s close of 79.7950.
The local currency last week traded in a range of 79.30-80.12 amid central bank interventions and broad dollar strength.
Last week’s range is “our new support and resistance levels” for the USD/INR pair, a trader at a Mumbai-based bank said. It will be “quite a task to take out the 80 level”, he said, adding that the psychological level “will continue to attract” speculators and exporters.
The dollar index climbed to 110.02, boosted by a decline in the euro after Russia’s indefinite closure of its main gas supply pipeline to Europe stoked fears of energy shortages and a hit to growth.
Russia scrapped a Saturday deadline for flows down the Nord Stream pipeline to resume, citing an oil leak in a turbine.
Indian rupee seen lower after dollar surge; US jobs data eyed
It coincided with the Group of Seven finance ministers announcing a price cap on Russian oil.
Tracking the dollar index, Asian currencies declined.
The offshore Chinese yuan dropped to 6.9378 to the dollar, while the Korean won dropped 0.6%.
On Friday, the dollar index had declined below 108.30 in intraday trading following a US jobs report that prompted traders to reduce the odds of a 75-basis-point Federal Reserve rate hike this month.
Headline jobs additions were in line with expectations but overshadowed by an uptick in the unemployment rate and a slower-than-expected increase in average hourly earnings.
The dollar recovered to close almost flat on Friday after US equities reversed early gains.
The S&P 500 Index finished 1% lower after climbing 1.3% earlier on Friday. US equity futures were flat, while Asian shares were mixed on Monday.
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