Advertisement

Rupee once again unmoved by dollar's broad strength

A customer hands Indian currency notes to an attendant at a fuel station in Mumbai

By Nimesh Vora

MUMBAI (Reuters) - The Indian rupee was barely changed to the U.S. dollar on Tuesday despite its weak Asian peers, on expectations that the local currency remained well supported at near to current levels.

The rupee was at 82.7475 to the dollar at 10:08 a.m. IST, almost unchanged from 82.7225 in the previous session.

The offshore Chinese yuan was down 0.3% to the dollar, the Thai baht declined 0.6% and the Indonesian rupiah fell 0.2%.

The Reserve Bank of India's likely intervention has contributed to the rupee's recent price moves.

USD/INR is in a narrow range and with no major economic releases in store for the next few days, this is unlikely to change, said Srinivas Puni, managing director at QuantArt Market Solutions.

The minutes of the Federal Reserve's latest policy meeting can change this if they deviate from what the central bank officials have been saying, Puni added.

Fed officials have been mostly quite hawkish in recent days with two policymakers advocating the possibility on a 50 basis points rate hike to tackle inflation.

Economists, meanwhile, have revisited their estimates of the Fed peak rate and inflation forecasts.

BofA Securities in a note last week said it was revising its U.S. inflation outlook higher.

"We add a 25 basis points rate hike in June from the Fed for a new terminal of 5.25-5.5%. We maintain the first rate cut in March 2024," BofA said.

The dollar index rose to 104.08, tracking U.S. yields. The two-year Treasury yields, resuming trade following Monday's U.S. holiday, climbed to 4.68%.

(Reporting by Nimesh Vora; Editing by Sohini Goswami)