MUMBAI: The Indian rupee is expected to open higher-to-flat on Thursday with the drop in oil prices and inflows likely offset by the dollar’s recovery against its major peers.
Non-deliverable forwards indicate the rupee will open at around 83.28-83.32 to the US dollar compared with 83.32 in the previous session.
Dollar inflows related to initial public offerings and expected flows connected to the MSCI index changes helped rupee reach 83.25 on Wednesday.
While the rupee will be helped “at margin” by inflows and oil, it’s “all about just a 4-6 paisa move right now”, a forex trader at a bank said.
“Both dips and rallies are difficult to come by currently.”
Brent crude was at $80.55 a barrel in Asia following a volatile session on Wednesday.
Brent posted a low of $78.41 in the New York session after the Organization of the Petroleum Exporting Countries and allies including Russia delayed to Nov. 30 a ministerial meeting where they were expected to discuss oil output cuts.
The dollar index witnessed a bit of recovery and US Treasury yields rose after US initial jobless claims fell more than expected, prompting investors to not increase their wagers of a dovish Federal Reserve next year.
“US data were not weak enough to sway more Fed cut bets into the long Thanksgiving weekend,” DBS Research said in a note.
The US 1 year-ahead inflation expectations rose to 4.5%, providing another reason for investors to demand a higher yield and boosting the dollar on Wednesday.
It’s Thanksgiving Day holiday in US, which means there will be no cash dollar demand, the FX trader said.
Asian currencies and shares were mixed amid the positive cues from US
Source: brecorder.com
