The rupee was trading at 82.61 per dollar by 10:38 a.m. IST, against its previous close of 82.4925. Traders expected it to move in a 82.30-82.80 range for the day. The Reserve Bank of India's (RBI) hawkishness on Wednesday seemed to be supportive of the rupee, but there's anticipation that the Fed will continue tightening rates for longer than markets were initially expecting, which takes away the rupee's attractiveness, a private bank trader added. Most Asian currencies and stocks declined, while U.S. shares fell overnight as yields remained elevated on higher interest rate concerns. Several Fed officials on Wednesday said more interest rate rises are on the cards in the central bank's efforts to bring down inflation. Among them, New York Fed President John Williams said moving to a rate of between 5.00% and 5.25% "seems a very reasonable view." While Minneapolis Fed leader Neel Kashkari said he believes the rate will need to go as high as 5.4% or even higher if the data called for it.
Fed fund futures are pricing in rate cuts of about 30 to 35 basis points after peaking at around 5.12% in July. "The continuous increase in Federal Funds Rate expectations has made the monetary policy making for emerging economy central banks now a difficult proposition," SBI Economic Research report said. The 10-year U.S. yield was last at 3.6144% after reaching 3.692% last night, its highest since Jan. 6. It had hit 3.33% a day before the U.S. jobs report. Brent crude futures inched higher in Asia trading, adding to its overnight advance. Oil prices are up over 6% in the last three sessions. (Reporting by Anushka Trivedi; Editing by Nivedita Bhattacharjee)
anushka.trivedi.thomsonreuters.com@reuters.net))