MUMBAI: The Indian rupee stuck to a narrow range and hovered around the 82-per-dollar level on Monday, amid deeper losses for most Asian currencies and a lack of speculative interest, traders said.
The rupee traded in an 81.9400-82.0475 range before ending at 82.0400 to the dollar, marginally lower than 82.0350 on Friday.
“There is just nothing in it for traders. The hurdle for any kind of significant move is high and we are just stuck,” a spot dealer for foreign exchange said.
Indian rupee to nudge higher at open, avoiding losses in Asian peers
“The ongoing decline in yuan, like other things, is not a factor right now (for rupee). Why would there be interest in any kind of positions?,” the dealer pointer out.
The rupee remains among the least volatile currencies, Anindya Banerjee, the head of research for foreign exchange and interest rates at Kotak Securities, said, adding that he expects an 81.80-82.20 range for the week.
The offshore Chinese yuan declined further, adding to last week’s slide. The fading optimism over China’s reopening alongside monetary policy divergence vis-à-vis the major and emerging market currencies have prompted investors to dump the yuan. The yuan dropped to 7.2450, a new year-to-date low.
The dollar index fell to 102.75 while U.S. yields inched lower. Investors will have the U.S. jobless claims, core personal consumption expenditure and the GDP data on tap this week. The data will show the likelihood of the Federal Reserve following through on its projections of two more rate hikes this year.
The rupee forward premiums inched higher, with the 1-year implied yield up two basis points to 1.85%. The 1-year is now up around 16 bps from the recent sell/buy swaps by public sector banks, traders said.
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