Rupee gives up gains on dollar demand, lags Asian peers – Times of India

MUMBAI: The rupee reversed course to weaken on Monday as traders cited corporate outflows, while broader markets were buoyed by China scaling back some of its Covid curbs.
The rupee eased to 81.4600 per dollar by 10:32 a.m. IST, having opened at 81.23. It closed at 81.3175 on Friday.
The rupee had traded in a narrow range and gained 0.45% last week but underperformed its emerging market counterparts on forward dollar purchases by importers.
It is likely to continue that trend as oil importers on Monday bought dollars on dips in the USD/INR pair, said a foreign exchange trader.
The rupee will retreat from near 81-levels and is expected to stay confined to the 81-81.50 per dollar range in the near term, the trader added.
Most Asian currencies and stocks were higher after more Chinese cities in the far west announced the easing of some pandemic curbs on Sunday. The offshore yuan firmed 1% to an over-two-month high of 6.9499 per dollar.
Meanwhile, the dollar index slipped, extending last week’s losses.
Markets looked past the strong US jobs data released on Friday. Bond yields and the dollar rose initially, but investors later reckoned the data was unlikely to change the Federal Reserve’s path.
The US central bank is expected to increase rates by a smaller 50 basis points (bps) increment at the meeting next week.
Fed funds futures traders are now pricing for the Fed’s benchmark rate to peak at 4.92% in May.
Local markets are expected to be a bit cautious as the Reserve Bank of India begins its three-day policy meeting, with its decision due on Wednesday.
The central bank will likely raise interest rates by a smaller 35 bps to 6.25%, according to economists polled by Reuters, as inflation remains a concern.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *