Indian Rupee – The rupee strengthened due to strengthening Asian currencies and falling US yields. -November 29, 2023 at 06:23

The Indian rupee edged higher on Wednesday, helped by a fall in US yields and strength among its Asian peers on largely pessimistic comments from Federal Reserve officials.

The rupee was at 83.2850 against the US dollar at 10:45 IST, up 0.06 per cent, from its previous close of 83.3325.

The dollar index was last at 102.62 and near its weakest level in more than three months.

The 10-year U.S. Treasury yield weakened to 4.29% in Asia after falling 7 basis points in New York overnight, with comments from Fed officials indicating they were increasingly comfortable with current interest rates.

“I am increasingly confident that current policy is well positioned to slow the economy and return inflation to 2%,” Fed Governor Christopher Waller said on Tuesday.

Fed bank futures now forecast interest rate cuts of more than 100 basis points in 2024, possibly starting in May.

The rupee’s rise on further dollar weakness is likely to remain small, said a foreign exchange trader at a state bank. “However, (the rupee) is not reacting much to global indices at the moment.

Although the dollar index has fallen nearly 4% in November so far, the rupee has been almost flat on the month, unable to capitalize on the dollar’s weakness amid strong local demand for the greenback.

“Current low volatility suggests a stable range (but) the upside outlook prompts cautious anticipation of a potential breakout, perhaps below the 83.10-83.00 level (for USD/INR),” said Amit Pabari, managing director at eye consultancy CR Forex money.

Investors now await India’s third-quarter GDP data to be released today and US inflation data for October to be released on Thursday.

India’s GDP is expected to grow 6.8% quarter-on-quarter, according to a Reuters poll. (Reporting by Jaspreet Kalra; Editing by Sohini Goswami)

Serena Hoyles

"Twitter junkie. Hipster-friendly bacon expert. Beer ninja. Reader. Communicator. Explorer. Passionate alcohol geek."

Leave a Reply

Your email address will not be published.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