MUMBAI: The Indian rupee is poised to advance at open on Wednesday helped by the dollar selling in the offshore non-deliverable forwards. Non-deliverable forwards indicate rupee will open at 82.88-82.90 to the US dollar compared with 82.9625 in the previous session.
The one-month USD/INR NDF made a low of 82.92 in the New York session, implying a spot of 82.84.
The dollar index had dipped to near 103.80. Following the “reasonable” dollar selling, USD/INR will “have a follow through” to yesterday’s price action, an FX trader at a bank said.
“Now the question will be whether the support of 82.80 is at risk.”
Indian rupee weighs weakness in Asia FX, rising US Treasury yields
The rupee on Tuesday had its best day in two weeks despite a mostly difficult day for Asian peers. The dollar index’s fall to below 104 came amid a slight dip in US Treasury yields.
The US Treasuries tracked the UK and Canada on a day when there was not much economic data out from the world’s largest economy. Investors await the minutes of the Federal Reserve’s January meeting, due to release during US trading hours.
The Fed minutes “will be of particular interest to help gauge the central bank’s thinking around the inflation path and incremental progress required for a policy pivot”, ANZ said in a note.
Following the January Fed meeting outcome and on the back of an upbeat US job report and the higher-than-expected inflation, investors have significantly scaled back expectations on how many rate cuts the central bank will deliver this year.
Investors are currently pricing in 90 basis points of rate cuts this year, down from more than 150 bps one-and-a-half months back.
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