MUMBAI: The Indian rupee is expected to decline at open on Thursday as poor risk appetite fuelled demand for the safe-haven US dollar.
Non-deliverable forwards indicate the rupee will open at around 83.35-83.36 to the dollar compared with 83.3250 in the previous session.
Brent crude plunged nearly 4% on Wednesday to fall below $75 per barrel, the lowest since late-June.
Demand concerns have prompted a near 10% decline in Brent so far this month. Meanwhile, Indian equities have seen inflows of more than $3 billion in December, data by National Securities Depository shows.
“Looks like yesterday’s bit of a relief (for the rupee) will not last.
And this is despite another round of selloff on oil and the kind of flows we are seeing,“ a forex trader at a bank said.
“If we are still talking of supports and resistances (on USD/INR), then that lies at 83.20 and 83.40.”
US equities pulled back overnight and futures on the S&P 500 Index inched lower in Asia.
Japan and Hong Kong led Asian shares lower while the Korean won and the Indonesian rupiah paced the decline in Asia FX.
Indian rupee to gauge dollar’s recovery even as economic data drives US yields lower
The dollar index rose for the third straight day on Wednesday.
This was despite soft US economic data prompting a further fall in US bond yields. The 10-year US Treasury yield dropped to 4.10% after US private payrolls rose less than expected.
The data indicated “a deceleration in hiring momentum in the US”, ANZ said in a note. “The focus is now squarely on the November labour market report out later this week.”
The US non-farm payrolls data, due on Friday, is expected to show 180,000 job additions in November, according to economists polled by Reuters.
It is probable that the market has revised downwards its expectations in wake of the soft private payrolls and job openings data, ANZ said.
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