Asian currencies witness a bit of reprieve, lift rupee
By Nimesh Vora
MUMBAI (Reuters) - The Indian rupee rose against the dollar on Thursday, helped by a broad recovery in Asian currencies following losses fuelled by worries over rising U.S. yields.
The rupee was at 82.77 to the U.S. dollar by 10:29 a.m. IST, up from 82.85 in the previous session. Following the higher opening, the local currency has been in a three-paisa range.
The rupee, it can be safely assumed, will stick to the 82.80 level through the session, a currency dealer at a private sector bank said. Volumes are likely to be on the lower side and speculative interest will be minimal, he said.
The Korean won, the Asian currency worst impacted by the market's ongoing reassessment of the U.S. Federal Reserve's rate hike path, lead the recovery against the dollar on Thursday.
It was up 0.8% while others rose 0.2% to 0.3%. The dollar index declined slightly.
The Fed minutes released overnight noted that almost all participants preferred a 25 basis points (bps) hike at the Jan. 31-Feb. 1 Fed meeting, and a few would have liked a 50 bps hike.
However, the minutes did not have a significant impact on Asian currencies, as they were considered "outdated". Since the Fed's February meeting, there has been a series of data points on inflation and economic activity that surprised the market.
We’ve already been hearing from some Fed officials that they may be open to up the size of the rate hikes and that a higher terminal rate may be needed, Scotiabank said in a note.
Risk appetite in Asia was better, weighing on demand for the dollar. Asian shares were mostly higher and futures indicated a positive opening for U.S. equities. Oil prices inched up, recovering from two-week lows.
(Reporting by Nimesh Vora; Editing by Janane Venkatraman)