MUMBAI: The Indian rupee is expected to fall on Tuesday in wake of losses on Asian peers and poor risk appetite. Non-deliverable forwards indicate rupee will open at around 81.98 to the US dollar compared with 81.9350 in the previous session.
The rupee on Monday witnessed a quiet session, hovering in a 81.90-82.00 range.
“It is to be expected that there will be support (for USD/INR) at below 82,” an FX trader at a private sector bank said.
“Today, it looks like a another holding session with a mild bias on the upside (for USD/INR pair).
Indian rupee ends flat against dollar
Having said that, we would sell on the uptick.“ The offshore Chinese yuan dropped below 7.18 to the dollar, not too far from the year-to-date low.
China on Tuesday, expectedly, lowered two more key lending by 10 basis points. Other Asian currencies were down 0.1% to 0.3% while the dollar index inched up to 102.56.
Asian equities were mostly lower, pressured by China’s tepid post-pandemic recovery. Meanwhile, futures pointed to a sightly lower opening for US equities following the three-day weekend.
Focus this week is on Federal Reserve Chair Jerome Powell’s testimony to U.S lawmakers. This comes after the US central bank opted for a pause last week following rate hikes over the previous ten meetings.
However, it was a hawkish pause, with the median view of Fed officials about the terminal rate rising by 50 basis points to 5.625%.
While the Fed paused last week, “it has more work to do,” ANZ said in a note. “Although there are some encouraging signs that inflation is moderating, it isn’t sufficient,” ANZ said.
The bank pointed that core U.S inflation rose by 0.4% month-on-month in May, well above a rate consistent with 2% annualised inflation.
Comments
Comments are closed.