Currencies

Rupee slightly under pressure on cash dollar outflows, ET Auto



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The Indian rupee was slightly on the back foot on Thursday, pressured by equity-related dollar outflows, but traders expect the local unit’s downside to be capped by dollar selling-interest from exporters.

The rupee was at 82.8725 as of 10:20 a.m. IST, barely changed from its close at 82.8625 in the previous session.

The dollar index was higher by 0.1% at 102.88, while Asian currencies were mostly rangebound.

The rupee is likely to have a “mostly quiet day,” a foreign exchange trader at a state-run bank said, noting a continuation of equity-related outflows may pressure the currency slightly on Thursday.

Foreign investors net sold over $500 mln worth of Indian equities on Wednesday, according to provisional exchange data, which pressured the rupee to its worst day in three weeks.

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“After the outflows impact on the rupee, it is expected to trade in a subdued note between 82.75 and 82.90,” Arnob Biswas, head of foreign exchange research at SMC Global Securities said.

The 10-year U.S. Treasury yield inched up to 4.20% in Asia hours after rising 5 basis points (bps) on Wednesday as markets anticipate that sticky inflation in the United States may convince the Fed to further delay rate cuts.

Market participants are currently pricing in a 69% chance of a rate cut in June, down slightly from 72% a month earlier, according to CME’s FedWatch tool. A March cut has been nearly priced out, while the odds for a May cut are below 10%.

Investors will now be keeping an eye on the release of U.S. retail sales and initial jobless claims data for further cues on how the U.S. economy is faring.

  • Published On Mar 14, 2024 at 11:07 AM IST

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