MUMBAI: The Indian rupee is expected to open little changed on Tuesday, unable to take advantage of the broad up move in other Asian peers in the wake of a fall in US Treasury yields.
Non-deliverable forwards indicate the rupee will open mostly unchanged from 83.3675 on Friday.
The Indian FX and money markets were shut on Monday.
The Korean won climbed 0.8%, with other Asian currencies up between 0.1% to 0.3%, and the dollar index dipped to 103.08, its lowest level in nearly three months.
The dollar index is down more than 3% in November.
The rupee is just shy of its lifetime low of 83.42. The rupee “has not participated at all in this drawdown” on the dollar and “there is no reason to think it will today, or for that matter, this week”, a forex trader at a bank said.
A lack of hedging interest from exporters, slowdown in portfolio inflows, and persistent interest from importers to hedge their dollar liabilities are reasons for the rupee’s underperformance, according to market participants.
Indian rupee to gauge local dollar demand amid US, India holidays
Asian currencies rose on Tuesday, helped by US Treasury yields resuming their fall on the back of weak data.
The 10-year US yield dropped nearly ten basis points on Monday amid a bigger-than-expected drop in US October home sales.
The September figures were revised lower. The weaker numbers were attributed to the run-up in the long bond yield during these months, DBS Research said. There was more disappointing US data on Monday.
The November Dallas Fed manufacturing index fell 0.7 to -19.9, with new orders “particularly weak”, according to ANZ.
The focus this week will be on the US October core PCE data on Thursday and the ISM manufacturing print on the following day.
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