Rupee lingers in narrow band tracking mostly subdued Asian peers
By Jaspreet Kalra
MUMBAI (Reuters) - The Indian rupee was largely flat on Friday, tracking rangebound Asian peers with traders expecting the local unit to stick to its prevailing range ahead of closely watched U.S. inflation data.
The rupee was at 83.33 against the U.S. dollar as of 10:00 a.m. IST, barely changed from its close at 83.3150 in the previous session. The currency hovered in a tight band between 83.3075 and 83.34 in early trading.
Asian currencies were mostly rangebound despite a surge in US bond yields but the Japanese yen dropped to its lowest in 34 years after the Bank of Japan kept policy rates unchanged.
The rupee is likely to trade "sideways as market might want to wait for PCE inflation data to give direction to the dollar," a foreign exchange salesperson at a private bank said.
The dollar index was steady at 105.7 even as the 10-year Treasury yield rose above 4.70% for the first since November after a US inflation reading cemented bets that the Federal Reserve will not rush to cut interest rates.
Meanwhile, U.S. GDP data for the January-March quarter showed that the U.S. economy grew at an annualized rate of 1.6% last quarter, below the 2.4% gain expected by economists.
Odds of a Fed rate cut in July have dropped to about 33%, down from slightly above 40% a week earlier, according to CME's FedWatch tool.
During the day's session, the rupee could "rise to 83.25 ... where importers are expected to buy dollars", limiting the rupee's gains, Anil Bhansali, head of treasury at Finrex Treasury Advisors said.
Investors now await US personal consumption expenditure data due later on Friday with economists polled by Reuters expecting the data to show that core PCE prices rose 0.3% month-on-month in March.
(Reporting by Jaspreet Kalra; Editing by Janane Venkatraman)
