Rupee faces opposition at 82/USD; premiums at highest since October
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The Indian rupee rose against the U.S. dollar on Wednesday amid weakness in the American currency, but was not able to move past a key level, while lower U.S. yields pushed far forward premiums to their highest since October.
The rupee was at 82.1850 to dollar by 11:00 a.m. IST, up from 82.3325 in the previous session. The rupee reached an intraday high of 82.0525.
"Based on how it has been over last few days, it's not unexpected to see this (recovery from 82.050). More than likely that importer orders were filled up," an FX sales person at a private sector bank said.
"You just have to keep playing the 82 to 82.50 range for now."
Asian currencies were up on the back of U.S. data that could possibly make the Federal Reserve less willing to raise rates at its next meeting. U.S. job openings fell to a two-year low, data released on Tuesday showed, following a weak manufacturing data.
"The tight U.S. labour market is getting less tight, and the Fed rate hike cycle is increasingly viewed as approaching its end," Chang Wei Liang, macro strategist at DBS, said in a note.
The dollar index declined to its lowest level in two months. U.S. yields tumbled with the 2-year down to 3.85%.
Tracking the fall in U.S. yields, USD/INR far forwards rose to the highest level since October. The 1-year implied yield rose 10 basis points to 2.54%.
Focus now turns to the Reserve Bank of India policy decision on Thursday and the U.S. jobs data on Friday. The RBI is expected to deliver a 25 bps rate hike, and economists expect the U.S. economy to have added fewer jobs last month than in February.
