Home Markets Indian Rupee Records Second Weekly Gain; Softens on Daily Basis Amid Importer Dollar Demand

Indian Rupee Records Second Weekly Gain; Softens on Daily Basis Amid Importer Dollar Demand

by Thomas

Rupee shot lower on Friday after pulling out of the greenback by the dollar demand from the importers and oil firms though it resulted in weekly gains on account of foreign fund inflows into the share and bond markets.
The rupee closed at 82.9375 pm U.S dollar vs its previous close of 82.84.
In that week, the price of the rupee climbed 0.1%. The unit reached a 3-week high on Thursday of 828350. Traders.who’s part price was not able to cross resistance level 82.80 this week,despite inflows, are likely to be intervened by Reserve Bank of India (RBI).

“… where we don’t expect the rupee to hit above 82.70/82.80 as the central bank may try to intervene, buying up US dollars.” Jigar Trivedi, Senior Research Analyst Currencies and Commodities Reliance Securities added.
Considering its “cautious stance” on rate cuts, the rupee will still feel some pressure, added Mr Aleitau.
Fed Governor Christopher Waller said Thursday that policymakers should wait another two months before doing a rate cut so as to see if the recent pick-up in inflation signals inflation firms down defying a better control or is just a speed hump on the road to the goal.

Minutes from the previous Fed meeting highlighted that the central bank needed to be certain the inflation risks are in check before lowering the rates.
The March U.S. rate cut is priced-out of the market and the odds for a cut in May reach less than 25% only.
The market is now waiting for the PCE index, both headline and the core, from the United States in the next week to hear from them the time the interest rate cuts would be made.
The data is likely to receive even more scrutiny due to the US CPI reading that came out higher-than-expected.

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