MUMBAI, Sept 30 (Reuters) – The Indian rupee fell on Monday, pressured by dollar demand from foreign banks, while most of its Asian peers gained after China’s economic stimulus measures over the weekend boosted risk sentiment.
The rupee was at 83.7850 against the U.S. dollar as of 10:50 a.m. IST, down 0.1% on the day.
Strong dollar bids from a London-based and a New York-based bank pressured the rupee in early trading, a trader at a state-run bank said, adding that the currency’s intra-day fall should be limited to 83.85.
The dollar index was a touch weaker at 100.4 while most Asian currencies gained, led by the Malaysian ringgit and Thai baht, both up 0.5%.
While the rupee is set to post its first monthly gain since June, it continues to lag behind regional peers that have risen between 0.3% to 5.4% this month.
“The rupee, after experiencing a decent appreciation, has begun drifting back toward its typical range. This shift is driven by month-end dollar demand from importers, coupled with the RBI’s active management of the currency,” Amit Pabari, managing director at FX advisory firm CR Forex said.
The rupee had touched a near three-month peak of 83.4350 earlier in the month but has since pared gains.
Meanwhile, dollar-rupee forward premiums nudged higher, with the 1-year implied yield rising 1 basis point to 2.40%, near its highest level since May 2023.
Focus today will be on remarks from Federal Reserve Chair Jerome Powell, who may provide insights into the future direction of U.S. policy rates.
Interest rate futures are currently pricing in 75 basis points of rate cuts for 2024, with nearly-even odds for a 50 or 25 basis point cut in November.
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Reporting by Jaspreet Kalra; Editing by Nivedita Bhattacharjee
Our Standards: The Thomson Reuters Trust Principles.
