MUMBAI: The rupee inched higher on Tuesday, recovering somewhat from an unexpected slide late in the previous session as traders await the US Federal Reserve’s policy decision on Wednesday for hints on the pace of future rate hikes.
The rupee was at 82.6650 by 0450 GMT, compared with 82.7800 in the previous session. The local unit has traded in a roughly 6-paisa range so far.
The rupee slid from above 82.50 to almost 82.80 in the last hour of trading on Monday.
The “eye-popping” drop was probably fuelled by defence-related dollar payments and importers dollar demand, said Amit Pabari, managing director at CR Forex.
“Overall, the pair (USD/INR) has been seen picking up bids in the past couple of sessions,” Pabari said.
Asian currencies were mixed on Tuesday, while the dollar index dipped ahead of the Fed’s two-day meeting that begins later in the day.
The main focus will be on whether Fed Chair Jerome Powell opens the door for a 50-basis points rate hike in December. The Fed is tipped to raise rates by 75 bps for the fourth straight time.
“The 75 bps hike is widely expected and will likely result in limited market impact. Powell’s press conference will be more important,” BofA Securities said in a note.
After the Fed, US jobs data due on Friday and inflation data next week will key for the rupee, traders said.
Risk appetite was holding up well so far. Asian shares and US equity futures rose, while Indian equities climbed to their highest level since January.
Participation of foreign investors in the near 6% rally on India’s equity gauge, the BSE Sensex, last month was muted. Net flows were just about $1 million in October.
The rupee was at 82.6650 by 0450 GMT, compared with 82.7800 in the previous session. The local unit has traded in a roughly 6-paisa range so far.
The rupee slid from above 82.50 to almost 82.80 in the last hour of trading on Monday.
The “eye-popping” drop was probably fuelled by defence-related dollar payments and importers dollar demand, said Amit Pabari, managing director at CR Forex.
“Overall, the pair (USD/INR) has been seen picking up bids in the past couple of sessions,” Pabari said.
Asian currencies were mixed on Tuesday, while the dollar index dipped ahead of the Fed’s two-day meeting that begins later in the day.
The main focus will be on whether Fed Chair Jerome Powell opens the door for a 50-basis points rate hike in December. The Fed is tipped to raise rates by 75 bps for the fourth straight time.
“The 75 bps hike is widely expected and will likely result in limited market impact. Powell’s press conference will be more important,” BofA Securities said in a note.
After the Fed, US jobs data due on Friday and inflation data next week will key for the rupee, traders said.
Risk appetite was holding up well so far. Asian shares and US equity futures rose, while Indian equities climbed to their highest level since January.
Participation of foreign investors in the near 6% rally on India’s equity gauge, the BSE Sensex, last month was muted. Net flows were just about $1 million in October.
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