MUMBAI: The rupee was trading marginally higher to the US currency on Monday, buoyed by an uptick in Asian peers and expectations that a key level will hold.
The rupee was at 82.7375 per US dollar by 09:50 a.m. IST compared with 82.87 in the previous session.
The resistance near 83.00/83.25 is expected to hold out and at the same time, 82.50/60 should offer meaningful support, Anindya Banerjee, head research – fx and interest rates at Kotak Securities, said.
“We could be in for a narrow-range trading over this week.”
The rupee’s Asian peers were mostly higher on Monday, led by the Japanese yen. The yen rose to near-136 to the dollar, following a report by Kyodo on Saturday.
The news agency reported that Japan’s Prime Minister Fumio Kishida aims to make the Bank of Japan’s 2% inflation target a more flexible goal by revising its decade-old joint statement with the central bank.
The yen’s strength spurred the dollar index to drop to 104.56. This is not too far from its recent lows, despite hawkish remarks from the US Federal Reserve policymakers.
The Fed may need to lift US borrowing costs above the peak of 5.1% it pencilled in just this week, and keep them there, perhaps into 2024, to squeeze high inflation out of the economy, three Fed officials signalled on Friday.
The market expectations regarding the peak Fed rate are lower on bets that growth concerns will not allow the US central bank to lift rates as aggressively as they are currently indicating.
Markets expect a terminal rate of below 5%, to be reached around mid-2023.
The rupee forward premiums were little changed with the 1-year hovering near 2% after last week’s jump.
The rupee was at 82.7375 per US dollar by 09:50 a.m. IST compared with 82.87 in the previous session.
The resistance near 83.00/83.25 is expected to hold out and at the same time, 82.50/60 should offer meaningful support, Anindya Banerjee, head research – fx and interest rates at Kotak Securities, said.
“We could be in for a narrow-range trading over this week.”
The rupee’s Asian peers were mostly higher on Monday, led by the Japanese yen. The yen rose to near-136 to the dollar, following a report by Kyodo on Saturday.
The news agency reported that Japan’s Prime Minister Fumio Kishida aims to make the Bank of Japan’s 2% inflation target a more flexible goal by revising its decade-old joint statement with the central bank.
The yen’s strength spurred the dollar index to drop to 104.56. This is not too far from its recent lows, despite hawkish remarks from the US Federal Reserve policymakers.
The Fed may need to lift US borrowing costs above the peak of 5.1% it pencilled in just this week, and keep them there, perhaps into 2024, to squeeze high inflation out of the economy, three Fed officials signalled on Friday.
The market expectations regarding the peak Fed rate are lower on bets that growth concerns will not allow the US central bank to lift rates as aggressively as they are currently indicating.
Markets expect a terminal rate of below 5%, to be reached around mid-2023.
The rupee forward premiums were little changed with the 1-year hovering near 2% after last week’s jump.
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