By Nimesh Vora
MUMBAI, Feb 24 (Reuters) - The Indian rupee is likely to
open higher against the U.S. dollar on Friday, tracking the
overnight decline in the USD/INR non-deliverable forward (NDF)
market.
The 1-month USD/INR NDF indicates that the rupee is
likely to open at 82.62-82.66, compared with 82.7325 in the
previous session.
"We do not see any particular trigger for the USD/INR coming
off during the New York session and it was likely related to
position adjustments," a trader at a private sector bank said.
The lower opening for USD/INR, despite the decline in the
other Asian, lends a downside bias on the pair and possibly a
look at the 82.40-82.50 support, the trader said.
Other Asian currencies were mostly lower, pressured by
another robust economic data point that supported bets that the
U.S. Federal Reserve could maintain a hawkish stance for a
prolonged period.
The number of Americans filing new claims for unemployment
benefits unexpectedly fell last week, data released on Thursday
showed. This comes on the back of a better-than-expected January
jobs report, healthy retail sales and higher-than-forecast
inflation readings.
Fed funds futures traders are now pricing for the federal
funds rate to reach 5.34% in July and to remain above 5% all
year. Prior to the jobs report, the peak rate was itself below
5%. The Fed rate is currently in the 4.50%-4.75% range and two
rate hikes of 25 basis points each at the next two meetings have
been fully priced in.
The focus now turns to the core U.S. personal consumption
expenditures (PCE) data, the Fed's preferred gauge of inflation,
due later in the day.
The dollar index should extend its rise towards 106
if PCE deflators lift the U.S. Treasury 2-year yield above the
Fed rate, DBS Group Research said in a note.
The U.S. 2-year yield is currently hovering at 4.70%.
KEY INDICATORS:
** One-month non-deliverable rupee forward at
82.75; onshore one-month forward premium at 12 paisa
** USD/INR NSE Feb futures settled on Thu at 82.74
** USD/INR Feb futures expiry today
** Dollar index at 104.50
** Brent crude futures up 0.8% at $82.9 per barrel
** Ten-year U.S. note yield at 3.87%
** SGX Nifty nearest-month futures up 0.3% at 17,651
** As per NSDL data, foreign investors sold a net $7.5
million worth of Indian shares on Feb. 22
** NSDL data shows foreign investors bought a net $85.9
million worth of Indian bonds on Feb. 22
(Reporting by Nimesh Vora; Editing by Savio D'Souza)
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