MUMBAI: A rally in the Indian rupee that has lifted the currency to a three-month high is likely to pause on Wednesday in the countdown to a planned tariff announcement by the United States.
The 1-month non-deliverable forward indicated that the rupee will open at 85.60-85.64 to the US dollar compared with 85.47 on Friday.
India money markets were shut on Monday and Tuesday.
In March, the rupee posted its best monthly performance in more than six years, spurred by foreign portfolio and other inflows, coupled with a scaling back of bearish wagers.
Foreign investors purchased nearly $4 billion of Indian equities and bonds, a significant reversal from approximately $12 billion in outflows seen in January and February.
The rupee is heading into President Donald Trump’s “big moment” with a lot of positive momentum, a currency trader at a Mumbai-based bank said.
“Tomorrow’s market direction will hinge on the overall response to Trump’s announcement,” he said, adding that exporters will step in if there is a significant USD/INR upward correction.
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