Rupee to rise as dollar extends losses on US GDP growth revision


An attendant at a fuel station arranges Indian rupee notes in Kolkata

An attendant at a fuel station arranges Indian rupee notes in Kolkata, India, August 16, 2018. REUTERS/Rupak De Chowdhuri/File Photo Acquire Licensing Rights

MUMBAI, Aug 31 (Reuters) – The Indian rupee is expected to open higher on Thursday after the dollar index extended losses following a downward revision to U.S. economic growth in the second quarter.

Non-deliverable forwards indicate the rupee will open at around 82.62-82.64 to the U.S. dollar, compared with its close of 82.7325 in the previous session.

The currency has not been able to hold onto its opening gains in each of the last three sessions. It dropped to 82.80 on Wednesday.

Based on the recent price action and the modest moves on Asian currencies, “it will be no surprise” if the rupee struggles after the opening gains, a forex trader at a Mumbai-based bank said.

Asian currencies were up 0.1% to 0.2% after the dollar index fell for the third straight day on Wednesday to reach a two-week low.

The dollar index dropped to near 103 and U.S. Treasury retreated after weaker-than-expected growth and labour market data lowered expectations that the Federal Reserve will raise interest rates further.

U.S. gross domestic product increased at a 2.1% annualized pace in the last quarter, lower than the preliminary estimate of 2.4% growth. Meanwhile, U.S. private payrolls increased by a lesser-than-expected 177,000 jobs last month.

“U.S. macro data continued the softer theme that started a few days earlier,” ING Bank said in a note.

The 2-year U.S. Treasury yield inched lower on Wednesday and U.S. equities rose.

India’s GDP data is due later in the day. India’s economic growth likely accelerated to 7.7%, the fastest annual pace in a year, on robust service sector growth, a Reuters poll found.

“The GDP data is not going to have much of an impact on the rupee,” the fx trader said.

KEY INDICATORS:

** One-month non-deliverable rupee forward at 82.74; onshore one-month forward premium at 9 paisa

** USD/INR NSE September futures settled on Tuesday at 82.8050

** USD/INR September forward premium at 8 paisa

** Dollar index at 103.10

** Brent crude futures down 0.1% at $85.8 per barrel

** Ten-year U.S. note yield at 4.11%

** As per NSDL data, foreign investors bought a net $95.9 million worth of Indian shares on Aug. 29

** NSDL data shows foreign investors bought a net $167 million worth of Indian bonds on Aug. 29

Reporting by Nimesh Vora; Editing by Savio D’Souza

Our Standards: The Thomson Reuters Trust Principles.

Acquire Licensing Rights, opens new tab



Read More: Rupee to rise as dollar extends losses on US GDP growth revision

2023-09-01 03:43:00

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments