Rupee likely to struggle on risk-off ahead of U.S. jobs data
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The Indian rupee may be on the defensive versus the U.S. dollar at open on Friday in the wake of poor risk appetite ahead of the all-important U.S. non-farm payrolls data.
The non-deliverable forwards indicate the rupee will open on the weaker side of 82 compared with 81.9750 in the previous session.
Shares in Japan, South Korea and Hong Kong were down between 1.1% and 2.4%, and U.S. equity futures extended losses. The S&P 500 index declined about 2% overnight.
U.S. bond yields tumbled alongside equities, extending the decline in Asia. The two-year U.S. yield is now below 4.80%. The dollar declined versus a basket of peers and Asian currencies were mostly lower.
With conflicting leads, the rupee will follow its Asian peers at open, a trader at a Mumbai-based bank said. After that one has to see if there were any dollar offers that were there in the last two sessions, he added.
The U.S. jobs report due later in the day will draw more than usual scrutiny after Federal Reserve Chair Jerome Powell said that the central bank's March rate decision will be data-dependent.
Apart from the U.S. jobs report, next week's inflation data will be shaping expectations of whether the Fed will hike rates by 25 basis points or 50 bps at this month's meeting, according to analysts.
The January U.S. jobs report was way better than what analysts had expected, prompting investors to where the Fed rate cycle will pause. Economists forecast 250,000 job additions last month.
"It feels like the market is still positioned for a print of 250,000 and above consensus surprise," Chris Weston, head of research at brokerage Pepperstone said in a note.
"After all, NFP (non-farm payrolls) has beaten expectations in 10 of the past 10 releases."
KEY INDICATORS:
** One-month non-deliverable rupee forward at 82.29; onshore one-month forward premium at 16.75 paise
** USD/INR NSE March futures settled on Thursday at 82.0975
** USD/INR March forward premium at 7 paise
** Dollar index marginally lower at 105.20
** Brent crude futures down 0.3% at $81.3 per barrel
** Ten-year U.S. note yield falls to 3.84%
** SGX Nifty nearest-month futures down 1.0% at 17,444
** As per NSDL data, foreign investors bought a net $481.3mln worth of Indian shares on Mar. 8
** NSDL data shows foreign investors sold a net $152.1mln worth of Indian bonds on Mar. 8
