Powered by: Motilal Oswal
01-01-1970 12:00 AM | Source: Reuters
Dollar pullback ahead of U.S. inflation data to lift rupee at open
News By Tags | #240 #881 #597 #126 #92 #97 #1595

Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel

The Indian rupee was poised to open higher against the U.S. dollar, tracking a broad pullback on the currency in the lead-up to key U.S. inflation data due later on Tuesday.

The non-deliverable forward market indicated an opening of around 82.60 for the rupee compared with 82.7175 in the previous session.

Intraday position takers were not likely to chase the USD/INR pair lower at open, a spot trader at a Mumbai-based bank said.

The overnight risk of the U.S. data and India's surprise on inflation would mean little follow-through after the open, he added.

India's inflation rate rose to 6.52% in January from 5.72% in the previous month - well above the 5.9% estimate of economists polled by Reuters and breaching the Reserve Bank of India's upper target limit of 6% for the first time since October.

The "big" surprise clouds RBI's outlook, Barclays chief India economist Rahul Bajoria said in a note to clients.

"The RBI's hawkish rhetoric was a surprise for the market last week, but its position has been validated. We see risks of another rate hike in April," Bajoria said.

The dollar index inched lower in Asia to 103.20, adding to Monday's pullback.

Asian currencies were mostly higher ahead of data that is expected to show that U.S. inflation had eased.

"Today will be totally dominated by the U.S. CPI release, where the scope for market surprises is high," ING Bank said in a note.

Federal Reserve officials have continued to push their hawkish rhetoric but have to implicitly and explicitly acknowledge more evidence from data must be gathered before debating the size of further tightening, the bank said.

KEY INDICATORS: ** One-month non-deliverable rupee forward at 82.73; onshore one-month forward premium at 12 paise ** USD/INR NSE February futures settled on Monday at 82.76 ** USD/INR February forward premium at 4.5 paise ** Dollar index at 103.20 ** Brent crude futures down 0.9% at $85.8 per barrel ** Ten-year U.S. note yield at 3.7% ** SGX Nifty nearest-month futures up 0.1% at 17,810 ** As per NSDL data, foreign investors bought a net $209mln worth of Indian shares on Feb. 10

** NSDL data shows foreign investors bought a net $32.1mln worth of Indian bonds on Feb. 10