Rupee rises against dollar on rise in Asian currencies
The rupee and dollar indices fell on Friday as Asian currencies edged higher as a third-quarter slowdown in US consumer and business spending dented Treasury yields.
Bloomberg showed that the rupee was at 82.3225 per dollar after opening at 82.3813, as against 82.5025 on Thursday.
PTI reported that the rupee rose by 4 paise to 82.29 against the US dollar in early trade.
It is “increasingly clear” that the 82 to 83 level is probably the “new range” for the rupee, a Mumbai-based trader told Reuters.
“The Federal Reserve meeting next week is a potential risk point, but we suspect it will have the effect of pulling the rupee out of this range,” the trader said.
In the previous session, while the domestic currency edged higher at 82.15 in early trade, it weakened sharply thereafter, driven by broad-based dollar demand from importers who took advantage of the rupee’s depreciation.
Anil Kumar said, “Indian Rupee is expected to strengthen slightly at 82.40 after dollar buying yesterday, taking the rupee from high of 82.1350 to low at 82.50. Range for the day expected to be in the range of 82.00 to 82.60 It is,” said Anil Kumar. Bhansali, Head of Treasury at Finrex Treasury Advisors.
“RBI has brought a special meeting on November 3 to discuss inflation, which has remained consistently above 6 per cent. The meeting is after the Fed on November 2. RBI will
Discuss the contents of the letter to the Central Government on inflation and the steps taken to bring it down.”
The less-than-hawkish recommendations of the European Central Bank further fueled demand for US government bonds, and the Reserve Bank of Australia and the Bank of Canada decided to raise interest rates lower than investors expected.
Those pivots from central banks and the prospect that the Federal Reserve will begin reducing the pace of hikes after next week’s meeting has prompted traders to reevaluate their expectations.
