The rupee gained early Friday as the dollar breathed a sigh of relief after overnight volatility as traders looked at more aggressive interest rate hikes amid red-hot US inflation data triggered by oversold stocks and oversold currencies. The purchase made was framed by sentiment.
The rupee rose by 3 paise to 82.21 against the US dollar in early trade, PTI said.
Bloomberg showed the rupee at 82.2325 per dollar after opening at 82.2738, while its previous closing price was 82.3500.
Reuters reported that the USD/INR 1-month non-deliverable forward initially jumped to 83, but retreated near 82.50, similar to the dollar index.
A trader at a Mumbai-based bank told Reuters that the rupee would open near its weekly high of 82.15-82.17, and that it “won’t be a surprise”. The trader also pointed to potential dollar-buying interest from importers.
Oil prices reversed earlier losses and rose in early Asia trade as diesel inventories fell, while Saudi Arabia and the United States continued to argue about the Organization of the Petroleum Exporting Countries’ intention to cut production.
Wall Street shares made a spectacular comeback after a strong sell-off on Thursday. They closed higher in an extremely volatile session as investors went back on riskier bets with gains in Asian stocks and currencies.
“Asian markets will likely hold in early trading today, but after that, they may take a more cautious approach ahead of the weekend,” said Robert Cornell, head of regional research for Asia-Pacific at ING.
On Thursday, US core inflation, which does not include food and fuel prices, exceeded expectations and came in at 6.6 percent, the biggest annual increase in 40 years, driven primarily by significant price increases in the services sector. Inspired by.
Shortly after the release of the report, the dollar strengthened against its major competitors as Treasury rates rose and US equity futures fell.
Although Treasury yields fell from higher, US equity futures and the dollar had an intraday turnaround.
Analysts exaggerated the possibility of an unexpected rebound and losses in US stocks from the change in position.
“Equity investors still believe a strong US inflation does not negate expectations of a sharp decline in prices,” Rodrigo Catril, senior FX strategist at NAB, told Reuters.
“That may be true, but there is still a great deal of uncertainty about how quickly this decline will unfold, and for the Fed, this decline needs to be significant. A 6 percent to 4 percent drop will not suffice,” the Fed assures. wants the core CPI to drop to 2 percent, and we’re still a long way from that target.”
The dollar index fell to 112.22 in Asia trading after immediately reaching around 114 in the data.
However, gains in riskier assets could quickly reverse as investors come to terms with the fact that rising US inflation will likely lead to higher interest rates over the long term, leading to a worldwide recession.
The temporary fall in the dollar was partly driven by a sharp recovery in Wall Street stocks, Commonwealth Bank of Australia strategist Carol Kong told Reuters. “I doubt a weak dollar will persist… the dollar is currently a safe-haven currency.”