Rupee slips below 81/USD on broad-based dollar demand
The Indian rupee was trading lower against the U.S. currency on Monday, unable to hold on to its advance at the open, as importers and speculators scooped up dollars.
The rupee was at 81.0825 to the dollar by 0506 GMT, down from 80.7950 in the previous session. The local unit had opened at 80.52.
There was a "mad rush" to buy dollars after the open and it was pretty much across the board, a spot currency trader said. It looks like the bottom (for USD/INR) is now in place at 80.50 levels, they said.
The rupee's slip comes after it climbed about 2% last week, helped by the soft U.S. inflation data. The rally had pushed the rupee into near over-bought territory, according to one widely followed technical indicator.
The 10-day relative strength indicator (RSI) dropped below 30 for USD/INR, a level that indicates that the dollar was oversold.
Meanwhile, Asian shares and currencies were mixed to begin the week as traders looked to gauge the impact of last week's U.S. inflation print. The odds of a 75-basis points (bps) rate hike by the U.S. Federal Reserve next month have fallen.
Still, there was significant uncertainty about the outlook. Fed governor Christopher Waller said on Sunday that the central bank may consider slowing the pace of rate hikes but that should not be seen as a "softening" of its battle against inflation.
Treasury yields rose in Asia trading after plunging last week. The dollar index inched higher and oil prices rose.
