MUMBAI: The Indian rupee was trading lower to the dollar on Friday, tracking concerns over the Federal Reserve rate view ahead of the U.S. monthly jobs report.
The rupee was at 82.6525 to the dollar by 10:56 a.m. IST, compared with 82.5550 in the previous session. It has been a quiet but relatively choppy session so far with the local currency briefly lurking near 82.50.
It’s not a big surprise that the 82.40-82.50 support on USD/INR pair is holding up, more so considering that a significant data point is lined up, a trader at a private sector bank said.
The monthly U.S. non-farm payrolls data is due later in the day with economists polled by Reuters expecting 200,000 job additions. Apart for the headline number, investors will be watching the unemployment rate and the wage growth reading.
The jobs report assumes importance in the wake of the data this week that pointed to a robust U.S. labor market. The employment component of the ISM manufacturing index, the private payrolls number and the initial jobless claims data have all indicated that the U.S. labor market is holding up well so far to the Federal Reserve’s rate hikes.
U.S. yields rose overnight with the 2-year reaching an over one-month high. The dollar index climbed about 1%.
The data points indicate that the U.S. labor market is still extremely tight and increases the probability of Fed delivering in line with its hawkish communication, IFA Global Research Academy said in a note.
A better-than-expected non payrolls data will make it more likely that the Fed does not down shift to a 25 basis points rate hike and instead raises rates by 50 basis points on Feb. 1, according to analysts.
Comments
Comments are closed for this article.