By Nimesh Vora
MUMBAI, Feb 16 (Reuters) - The Indian rupee is expected
to open slightly higher against the U.S. currency on Thursday,
tracking an uptick in most Asian currencies despite an overnight
surge on the dollar index.
The non-deliverable forwards indicated that the rupee will open at 82.70-82.75 to the dollar, compared with
82.8025 in the previous session.
The local currency on Wednesday managed to hold above the
closely watched 82.90-83.00 level despite mounting concerns over
U.S. interest rates.
Wednesday's session will reinforce the belief that it is
quite difficult for USD/INR to move above the 83 level, a trader
at a Mumbai-based bank said. Add to that the trade data and it
looks like USD/INR may be headed to the lower side of its recent
range, the trader said.
India's merchandise trade deficit in January hit its lowest
in a year at $17.75 billion, data showed. "The combination of falling goods deficit, downward
historical revisions (smaller deficits than estimated earlier)
and the rising services surplus has a positive implication for
current account dynamics," Barclays said in a note to clients.
The rupee's Asian peers rose on Thursday, helped by an
uptick in Asian shares and U.S. equity futures. The dollar's
jump against major peers overnight, following the U.S. retail
sales data did not have an impact on Asian currencies or
equities.
The dollar index climbed a six-week peak after U.S.
retail sales witnessed a sizeable rebound in January following
two straight monthly declines. The two-year Treasury yields initially jumped to near 4.70%,
the highest since November, before pulling back. The Federal
Reserve terminal rate expectations at near 5.25%. Retail sales now add to a slew of robust U.S. data for
January, which include non-farm payrolls and inflation, and this
could support short-term U.S. rate expectations, DBS Group
Research said in a note.
KEY INDICATORS:
** One-month non-deliverable rupee forward at 82.82;
onshore one-month forward premium at 12.50 paise
** USD/INR NSE Feb futures settled on Wednesday at 82.8850
** USD/INR Feb forward premium at 4.5 paise
** Dollar index at 103.62
** Brent crude futures up 0.6% at $85.86 per barrel
** Ten-year U.S. note yield near 3.80%
** SGX Nifty nearest-month futures up 0.3% at 18,070.50
** As per CDSL data, foreign investors bought a net 198.6mln
worth of Indian shares on Feb. 14
** CDSL data shows foreign investors sold a net $63.9mln worth
of Indian bonds on Feb. 14
(Reporting by Nimesh Vora; Editing by Rashmi Aich)
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