MUMBAI: The Indian rupee is expected to open little changed to the US dollar on Tuesday amid hawkish comments from US Federal Reserve officials and a recovery in the Chinese yuan.
The rupee is tipped at around 81.66-81.70 to the dollar, compared with 81.67 in the previous session.
The local has been in a narrow range mostly over the last few sessions, supported at the 81.90 level and facing resistance at near 81.50.
It’s difficult to see the rupee “deviating significantly” from its recent range this week, a trader at a Mumbai-based bank said.
The risk point will come only on Friday when the US jobs report is due, the trader said.
The offshore yuan was up 0.4% to the dollar at 7.2160 after Beijing beefed up support to the nation’s property sector. Meanwhile, China’s daily COVID infections dipped.
The concerns over the protests in China against strict COVID restrictions have spurred more volatility for the yuan and for other Asian currencies.
The dollar index rose overnight after Fed officials pushed back against rate cuts next year.
The Fed needs to raise rates quite a bit further to control inflation and lower it toward the central bank’s 2% goal, St. Louis Fed President James Bullard said.
New York Fed President John Williams said the central bank needs to press forward with rate hikes. US equities fell by the most in three weeks.
The impact on Treasury yields was limited.
Comments from Fed Chair Jerome Powell on Wednesday will be watched for cues on the direction of rate next year. Asian equities shrugged off the selloff on US equities and were mostly higher.
Chinese equities jumped 2%.
Comments
Comments are closed for this article.