Rupee may dip amid little relief for Asian peers from Powell's remarks
By Nimesh Vora
MUMBAI, July 3 (Reuters) -The Indian rupee is expected to open marginally weaker or flat on Wednesday as comments from the Federal Reserve Chairman on inflation progress provided scant relief to Asian peers.
Non-deliverable forwards indicate the rupee INR=IN will open in the 83.50-83.52 range to the U.S. dollar, compared with 83.5050 in the previous session. Asian currencies were mostly lower, while the dollar inched up following Tuesday's dip.
The rupee in the last three weeks had been roughly in an 83.35-83.60 band, "which you think will broadly hold", said a currency trader at a bank.
It was "likely to be a holding" session for the rupee with risk "slightly on the 83.55 way than on the 83.45", he said.
The biggest worry for the rupee currently was the Chinese yuan, according to the trader. The offshore yuan dropped to 7.3096, the weakest since November.
Fed Chair Jerome Powell, in a monetary policy conference in Portugal, discussed the United States being back on a disinflationary path while arguing that more data was needed before cutting interest rates to ensure that recent weaker inflation readings provided a true picture of what was happening to underlying price pressure.
"Powell offered a balanced view with an underlying tone of cautious optimism," Morgan Stanley said in a note.
The odds of a Fed rate cut at the September meeting currently were near 2-in-3. FEDWATCH
U.S. Treasury yields dropped during Powell's remarks. However, data showing U.S. job openings increased in May after posting outsized declines in the prior two months, stalled the rally in the Treasuries.
Investors will be eyeing the U.S. June jobs report due this Friday for more cues on the health of the labour market.
KEY INDICATORS: ** One-month non-deliverable rupee INRNDFOR= forward at 83.58; onshore one-month forward premium at 7.50 paise ** Dollar index =USD up at 105.7 ** Brent crude futures LCOc1 up 0.5% at $86.6 per barrel ** Ten-year U.S. note yield at 4.43% ** As per NSDL data, foreign investors sold a net $59.2mln worth of Indian shares on July 1
** NSDL data shows foreign investors bought a net $139.4mln worth of Indian bonds on July 1
Reporting by Nimesh Vora; Editing by Sohini Goswami
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
