USA Dollar

INDIA RUPEE-Rupee to test support on Asia Fx decline; focus on Bank of Japan outcome -March 18, 2024 at 10:49 pm EDT


MUMBAI, March 19 (Reuters) –

The Indian rupee is expected to weaken at open on Tuesday,
pressured by the broad uptick in the U.S. dollar with the focus
on the Bank of Japan’s interest rate decision.

Non-deliverable forwards indicate rupee will open
at around 82.94-82.96 to the U.S. dollar compared with 82.9050
in the previous session. Over the last month, the dollar/rupee
pair has repeatedly struggled to climb past the 82.95-83.00
region.

“You are definitely going to see selling interest (on
USD/INR) near the 83 area,” a currency trader at a bank said.

“There are two big events lined up (BOJ and Federal Reserve
policy reviews), either of which hold the potential for a major
swing.”

A fall below 83 for the rupee would mean a “windup” of the
uptrend it has enjoyed for several weeks, he said

The dollar index inched up, and the Japanese yen and
other Asian currencies were weaker heading into the BOJ’s policy
decision. The central bank could potentially exit the negative
interest rate policy, a development that will impact U.S.
Treasury’s yields and the dollar.

“The BoJ meeting has been the subject of a frenzy of
headlines, and the sheer number of articles in the local press
regarding a move away from negative rates does put the
proposition of a 10-basis-point hike a real risk,” Chris Weston,
head research at Melbourne-based broker Pepperstone said in a
note.

The yen so far has not benefited from the reports and is
currently at 149.30 to the U.S. dollar.

USDJPY traders are looking more intently at the Fed meeting,
and potential changes in the dot plot, Weston added.

The Fed’s dot plot in December had indicated three rate cuts
in 2024. In the wake of the recent higher U.S. inflation
readings, analysts see a risk that the new dot plot may indicate
only two rate cuts.

KEY INDICATORS:
** One-month non-deliverable rupee forward at 83.02;
onshore one-month forward premium at 7.50 paise
** Dollar index up at 103.58
** Brent crude futures down 0.1% at $86.8 per barrel
** Ten-year U.S. note yield at 4.33%

** As per NSDL data, foreign investors bought a net $93.3mln
worth of Indian shares on Mar. 15

** NSDL data shows foreign investors bought a net $115.3mln
worth of Indian bonds on Mar. 15

(Reporting by Nimesh Vora; Editing by Janane Venkatraman
)



Source link

Leave a Response