The Indian rupee opened flat to positive against the US dollar on Monday amid weakness in Asian currencies. The local unit opened at 82.44 a dollar, 2 paise higher as compared to Friday’s close of 82.46.
Asian currencies were down 0.2% to 0.4% and the dollar index inched higher at 103.58. Shorter maturity US yields rose – the 2-year was at its highest in two weeks – supporting the dollar, Reuters reported.
On Friday, the rupee ended 10 paise higher at 82.46 against US dollar.
Traders will keep an eye on the US inflation data due Tuesday, just a day before the US Federal Reserve’s interest rate decision along with the domestic retail inflation data due later today.
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Last week, the Reserve Bank of India kept the repo rate unchanged, but indicated that it remained cautious on the inflation outlook.
“The rupee is likely to hold its ground amid softening of crude oil prices and strong FII inflows into the domestic market. Meanwhile, investors will keep an close eye on inflation data from India after central bank kept its rates steady last week and CPI data from US ahead of US Federal Reserve interest rate decision,” ICICI Direct said in a report.
It expects USD/INR to face a hurdle near 82.70 and move back towards 82.30. Only a close below 82.30 would weaken the pair towards 82.10, it added.
Meanwhile, crude oil prices traded lower as investors remained cautious ahead of the US Fed’s policy decision, while concerns about China’s demand and rising Russian crude supply weighed on the market.
Brent crude futures fell 1.18% to $73.91 a barrel, while US West Texas Intermediate (WTI) crude declined 1.20% to $69.33 a barrel.
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The Indian benchmark equity indices, Sensex and Nifty were trading marginally higher in the pre-opening trade.
On Friday, The foreign institutional investors (FII) sold Indian shares worth ₹308.97 crore, while the domestic institutional investors (DII) net purchased shares worth ₹1,245.51 crore, data available on the exchanges showed.
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Updated: 12 Jun 2023, 09:20 AM IST