off-the-wire

INDIA RUPEE-Rupee likely higher after dollar reverses post U.S. inflation rally

Kitco Media
By Reuters
Published:
Updated:
Reuters
By Anushka Trivedi and Nimesh Vora MUMBAI, Feb 28 (Reuters) - The Indian rupee is poised to open higher versus the U.S. currency on Tuesday as the dollar's rally after the U.S. inflation data faded. The non-deliverable forward indicate that the rupee will open at 82.66-82.68, compared with 82.8350 in the previous session. With the rupee yet again avoiding a decline below 83 on Monday, thanks to the Reserve Bank of India, the interbank long dollar positions will be "feeling more defeated," a spot trader at a Mumbai-based bank said. "In the market, dollar inflows are very little and it is the RBI that is on the selling side" and keeping the rupee within a range, said Anil Bhansali, head of treasury at Finrex Treasury Advisors.


The dollar index fell overnight, with U.S. equities a tad higher and yields declining slightly. The moves reflected a reversal for the three markets from Friday post the higher-than-expected increase in the U.S. personal consumption expenditures (PCE) price index. Tracking the dollar index, Asian currencies were higher on the day. The offshore Chinese yuan was at 6.9544 to the dollar after having declined to near 6.99 intraday on Monday.
Asian shares were mostly higher and U.S. equity futures inched up. Investors are squarely focussed on the outlook for U.S. interest rates following a slew of surprise economic readings. There are at least six Fed policymakers on the speaking diary this week to offer a running commentary on the likelihood of further rate hikes. Money markets have fully priced in three 25 basis point (bps) rate hikes at the next three Fed meetings. Meanwhile, India's December-quarter economic growth data will be released after trading hours. Economists polled by Reuters expect India's economic growth to have slowed further on weakening demand.


KEY INDICATORS:



** One-month non-deliverable rupee forward at 82.89; onshore one-month forward premium at 15 paise



** USD/INR NSE March futures settled on Monday at 82.9250



** USD/INR March forward premium at 12.5 paise



** Dollar index at 104.74, intraday high on Monday was 105.36



** Brent crude futures at $82.4 per barrel after slipping overnight


** Ten-year U.S. note yield little changed at 3.92%



** SGX Nifty nearest-month futures up 0.0% at 17,493



** As per NSDL data, foreign investors sold a net $163.5mln worth of Indian shares on Feb. 24



** NSDL data shows foreign investors sold a net $39mln worth of Indian bonds on Feb. 24 (Reporting by Nimesh Vora; Editing by Dhanya Ann Thoppil)

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