Asian Currency

Rupee ends flat, wedged between Asia FX bump, foreign banks’ dollar buys

The Indian rupee ended little changed on Thursday, after hovering in a tight range for much of the session as positive cues from a slight pickup in its Asian peers were offset by dollar demand from foreign banks.

The rupee closed at 83.1225 against the U.S. dollar, barely changed from its close at 83.1375 in the previous session.

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While the rupee logged some gains early in the session, it largely oscillated between 83.13 and 83.15.

“Until the rupee’s trading range breaks decisively, it’s likely to keep reverting back to these levels,” Gaurang Somaiya, an FX research analyst at Motilal Oswal Financial Services said, referring to the rupee’s gradual decline below the 83 handle after rising to an over fourth-month peak of 82.77 on Monday.

Dollar bids from foreign banks, likely on behalf of custodian clients, pressured the rupee, although the bids were milder than on Wednesday, a foreign exchange trader at a private bank said.

Indian equity indices extended their decline, with the benchmark BSE Sensex and Nifty 50 ending lower by 0.4% and 0.5%, respectively, after logging their sharpest daily decline since June 2022 on Wednesday.

Most Asian currencies ticked higher, led by the Korean won’s near 0.4% rise, while the offshore Chinese yuan inched up 0.1%.

The dollar index last quoted lower at 103.24 after climbing to its highest level in over a month on Wednesday following robust U.S. economic data that prompted traders to ease their bets of aggressive rate cuts by the Federal Reserve.

Attention now turns to U.S. initial jobless claims data and remarks from Atlanta Fed President Raphael Bostic later in the day, which may offer cues on policy rates.

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