Rupee today: Domestic currency almost flat against weakness in dollar
The rupee edged a touch lower against a weaker dollar on Tuesday but remained mostly steady after a sharp rise in the previous session when it halted two days of losses.
Bloomberg showed the rupee was last changing hands at 82.7238 per dollar, compared to Monday’s close of 82.7025.
Amit Pabari, Managing Director, CR Forex Advisors, said: “After last week’s series of economic events saw the dust settle on global financial markets, markets will remain calm over the Christmas holiday.”
The domestic currency posted modest gains in the previous session as the dollar declined, breaking a two-session skid. Additionally, expectations of an improvement in demand from China contributed to the mood to some extent.
But investors predict few bumps in the way of relaxation of Covid restrictions driven largely by a surge in cases in China and the likelihood that US interest rates will rise more than anticipated in 2023.
The big news in the currency market was a jump in the yen to a 4-month high after the Bank of Japan (BOJ) decided to reconsider its yield curve control strategy and extend the trading range for the yield at 10-10. year government bond.
The dollar fell 3.1 percent to 132.68 yen, a level last seen in mid-August.
“It was really out of the box,” Bart Wakabayashi, branch manager of State Street in Tokyo, told Reuters.
“We are seeing them starting to test the market regarding their exit strategy,” he said. For dollar-yen, “we could see a break below 130. It is within reach this year.”
The yen’s gains were widespread.
The euro and sterling also fell 3.3 percent to 140.44 yen and 160.76 yen, respectively, their lowest levels since late September.
“You can look at any yen pair, and they look very similar — the yen’s strength makes up for the loss of the currency you trade it against,” Matt Simpson, market analyst at CitiIndex, wrote in an email to Reuters. “
“From here, it looks like USD/JPY may now head towards 130 as it breaks out to a new cycle low.”
Beyond the Japanese yen’s dramatic move on Tuesday, investors continued to process the Federal Reserve’s message on higher long-term interest rates.
“The hawkish Fed policy update remains fresh on investors’ minds,” buoying US yields and the dollar, Rodrigo Catril, strategist at National Australia Bank, wrote in a client note, according to Reuters.
At the same time, “consolidation is the theme within FX” amid reduced market liquidity over the holiday season, he added.
featured video of the day
The market climbed more than 1%, closed at a new record level