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The Indian rupee is expected to open higher following regional currencies and rebound in the risk assets after the minutes of the Fed and RBI. The one-month forward USDINR was quoted at 82.93 with a loss of 11 paise from yesterday’s 5 pm IST. On Wednesday, spot USDINR gained 6 paise to 82.86 amid geopolitical worries, risk-averse sentiments and a stronger dollar against regional currencies.

The US dollar extended gains after the release of FOMC minutes that concluded on February 1. Rising US equity futures pulled Asian equities higher Thursday in a sign that the four-day run of declines for the S&P 500 is primed for a snapback.

Minutes of the Reserve Bank of India: It maintained the outlook for inflation is mixed. Taken together with the surprise jump in January inflation, which climbed back above the RBI’s target ceiling, means another rate hike is likely at the April meeting. The monetary policy committee is expected to remain in a tightening mode, but there is uncertainty about its trajectory, RBI gov.said.

Minutes of US Fed Reserve: FOMC officials are still eyeing more rate increases, though almost all agreed on ratcheting down the pace of hikes. "A few" made the case for a 50-bp move while some warned that an "insufficiently restrictive" policy could stall progress on moderating price pressures, suggesting they're prepared to tighten beyond their December forecast of a 5.1% peak

Fed funds futures traders are now pricing the fed funds rate to reach 5.35% in July, and remain above 5% all year. The Fed's target range stands at 4.5% to 4.75%, having risen rapidly from0% to 0.25% in March 2022.

What to watch: Jobless claims data due Thursday in the US will help shine a light on the strength of the labour market. Eurozone inflation data due today will also help investors outline the health of the European economy

USDINR

Technical Observations:

USDINR February futures has been consolidating in a narrow range of 50 paise start of the month.

The pair has a downward-slopping trend line resistance at 83.10, adjoining swing highs of 83.32 and 83.17. It has support at 82.73, the 10-day exponential moving average.

Momentum oscillator, Relative Strength Index is hovering around 60, a sign of positive momentum.

The derivative data shows a short buildup as the price gained while open interest declined.

In the near term, USDINR February futures may consolidate between 83 to 82.50. While the short-term trend remains up as long as it trades above 82.50.

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