Rupee looks to sustain upside momentum aided by dollar inflows – Times of India

MUMBAI: The Indian rupee will look to rise further versus the US currency on Thursday, helped by dollar inflows, while contending with mixed Asian currencies.
The non-deliverable forwards indicate the rupee will open at around 81.70-81.75 to the dollar compared with 81.76 in the previous session.
The local currency on Wednesday managed a rally in the afternoon session, supported by sizeable dollar sales by two foreign banks, which some traders said were mostly IPO-related.
“Sizeable (dollar) offers (from foreign banks) and the Reserve Bank of India not being there is making us hopeful of a breakdown (on USD/INR),” a spot trader said.
“Obviously, that could quickly change if the RBI decides to intervene and not allow more downside (on USD/INR.”
To maintain its momentum, the rupee will have to contend with tepid risk appetite and mixed Asian peers. Asian shares struggled for direction following overnight losses on the S&P 500 Index. The offshore Chinese yuan was little changed at 6.94 to the dollar, while the Korean won weakened.
The dollar index slipped overnight, weighed by an upbeat euro that was near a one-year high versus as Europe’s resilient economy contrasted with banking contagion risks in the United States and the debt ceiling standoff.
The US House of Representatives on Wednesday narrowly passed a bill to raise the government’s $31.4 trillion debt ceiling that includes sweeping spending cuts over the next decade. The bill is unlikely to pass the Senate.
In data, new orders for key US-manufactured capital goods fell more than expected in March and shipments declined.
“It is possible that business fixed investment is slowing in response to higher interest rates,” ANZ said in a daily note to clients.