MUMBAI, Dec 13 (Reuters) – The Indian rupee declined against the U.S. currency on Tuesday, on persistent dollar demand from importers and weak Asian cues.
The rupee was quoting at 82.6225 per dollar by 10:42 a.m. IST, compared with 82.53 in the previous session. The rupee has held an 82.62-to-82.73 range so far.
The “structural and usual” dollar demand is obviously pulling USD/INR higher, but it’s proving difficult to point to what is exactly prompting the recent sizeable underperformance of the rupee, a trader at a Mumbai-based bank said.
The USD/INR should once again run into small offers around 82.75, a level that has been rejected twice in the last few days, the trader added.
Asian currencies declined on cautious sentiment ahead of the U.S. inflation data due later in the day, which will be followed by the Federal Reserve’s policy decision on Wednesday.
The U.S. headline and core inflation rates are both expected to moderate, lending support to expectations that the Fed will deliver a smaller rate hike.
A surprise on either side could have major implications for interest rates and the foreign exchange market. Last month, a small surprise to the downside prompted a more-than-3% slide on the dollar index in two sessions.
Heading into the data, traders have priced in a 3-in-4 chance that the Fed will raise rates by 50 basis points (bps), while the rest expect a 75 bps hike.
Meanwhile, The USD/INR forward premiums declined on Tuesday after India’s consumer inflation rate moderated much more than what analysts had forecast in November.
The November forward premium was quoting at 1.50 rupees, down from 1.5250 in the previous session. The 1-year implied yield was down four bps at 1.88%.
Reporting by Nimesh Vora; Editing by Savio D’Souza
Our Standards: The Thomson Reuters Trust Principles.
Read More:INDIA RUPEE Rupee falls on dollar demand from importers, eyes 82.75 support
2022-12-13 17:17:23
