After positive U.S. economic statistics raised U.S. bond yields and caused the dollar to resume its upward trend, the Indian rupee is probably going to open lower on Wednesday.
According to the one-month non-deliverable future, the rupee will open between 85.80 and 85.81 to the US dollar, down from 85.7125 the previous day.
As statistics revealed that job opportunities in the U.S. increased to 8.098 million, surpassing predictions for a 7.7 million increase, and services sector activity also surged, the dollar index fell to 108.5 during Asia trade after increasing 0.3% on Tuesday.
The greenback dipped to its lowest level in the week on Monday as the traders were assessed.
U.S. President-elect Donald Trump’s tariff policies match with the aggressive rhetoric.
The 10-year Treasury yield increased by roughly 8 basis points to 4.69%, the highest level. Since April of last year, in response to the data and a supply of 10-year U.S. Treasuries worth $39 billion.
The rupee has been under pressure in recent weeks due to the U.S. dollar’s continued gain, worries about India’s slowing economic development, and sluggish capital flows.
According to data released on Tuesday, India has set its prediction for annual growth in the year ending in March at 6.4%. The slowest pace in four years, while foreign investors have net sold around $2 billion worth of Indian equities and bonds so far in January.
“Juxtaposing less favourable global catalysts (slippery yuan included) and domestic drivers, we expect the rupee to lose ground this quarter,” DBS Bank said in a note.
It also added
“Rupee traders have been keen to assess the new RBI (Reserve Bank of India) Governor’s view on the currency since he assumed office last month. Recent INR price action points to a higher tolerance for a weaker exchange rate,”.
Asian currencies were mostly weaker on Wednesday, with the offshore Chinese yuan trading lower at 7.34.
