MUMBAI: The Indian rupee weakened on Wednesday, yet again failing to sustain its positive opening on U.S. dollar demand from state-run banks, traders said.
The rupee was at 82.75 by 10:50 a.m. IST, having opened at 82.66, compared with a close of 82.7050 in the previous session. This is the third day that the local currency has not been able to hold on to the positive opening.
The rupee is likely to trade range-bound during the day, said Arun Bansal, head of treasury at IDBI Bank. “Today we may again see buying (of dollars) by large importers, with US GDP data due tonight.”
Public sector banks and foreign banks were buying dollars, a foreign exchange sales executive at a private bank said. The dollar demand from public sector banks was likely for importers, while the reason for foreign banks was not clear.
The rupee’s Asian peers were higher, with the Malaysian ringgit and Indonesian rupiah leading the way, helped by the drop in U.S. yields.
U.S. Treasury yields dropped on Tuesday after data showed job openings in the world’s largest economy fell more than expected, possibly signalling some loosening in the labour market.
The odds of a rate hike by the U.S. Federal Reserve at the November meeting dropped.
U.S. gross domestic product (GDP) data for the June quarter due later in the day will offer cues on how much momentum the U.S. economy still holds, with potential implications for the Fed’s rate hike plans.
India’s GDP numbers are due on Thursday.
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