The rupee will now have to contend with the support (on USD/INR pair) near to the 82.50 level, which will be "difficult to infringe," the trader said. Beyond the yuan, other cues for the rupee were negative. The 2-year U.S. yield was up at 4.84%, the dollar index was at 104.98 and India's GDP data disappointed.
Data released late Tuesday revealed that India's economy recorded year-on-year growth of 4.4% in October-December, down from 6.3% in July-September and below the 4.6% reading expected by economists polled by Reuters. "The moderation in year-on-year GDP growth reflects less supportive base-effect," IDFC First Bank said in a note. "From a monetary policy perspective, the GDP print is unlikely to change the RBI’s (Reserve Bank of India's) focus from tightening policy, as growth was in line with RBI’s estimate." Meanwhile, the focus is on the U.S. ISM manufacturing data due later in the day and services print on Friday for cues on the current U.S. Federal Reserve interest rate cycle.
Futures pricing currently suggests a peak of around 5.4% in
the Fed funds rate by September. KEY INDICATORS:
** One-month non-deliverable rupee forward at 82.77;
onshore one-month forward premium at 21 paisa
** USD/INR NSE March futures settled on Tue at 82.7150
** USD/INR March forward premium at 12.0 paisa
** Dollar index at 104.94
** Brent crude futures up 0.5% at $83.9 per barrel
** Ten-year U.S. note yield rises to 3.94%
** SGX Nifty nearest-month futures down 0.1% at 17,378
** As per NSDL data, foreign investors sold a net $196.4 mln
worth of Indian shares on Feb. 27
** NSDL data shows foreign investors sold a net $7.2mln worth of
Indian bonds on Feb. 27
(Reporting by Nimesh Vora; Editing by Dhanya Ann Thoppil)
