The non-deliverable forward (NDF) indicates the rupee will open barely changed from the previous session's 82.50 closing. The rupee over last two sessions rose 0.4%. While NDF indicates a quiet opening, it may not be a surprise if the rupee opens lower, a trader at a Mumbai-based bank said. The USD/INR is near its perceived near-term range while the U.S. Federal Reserve's terminal rate pricing inched higher, the trader highlighted.
The 2-year U.S. Treasury yield, a good proxy to the Fed policy, rose to 4.92% in Asia trading, the highest level since 2007. The expectations regarding the peak Fed rate climbed to 5.48% and the probability that the U.S. central bank could opt for a 50 basis points rate hike in March reached near to 1-in-3. The 10-year U.S. yield climbed to 4%, a multi-year high. Data out of Europe on Wednesday alongside the prices paid component of the U.S. ISM manufacturing data, continued to fuel concerns that interest rates could keep climbing for longer than anticipated. German inflation accelerated in February, while the ISM survey's measure of prices paid by manufacturers rose to 51.3 in February from 44.5 in January. The ISM price paid index had moved above the 50 level for the first time since September, DBS Group Research pointed out. "Given the concern that U.S. disinflation might be losing momentum, markets are wary that prices paid may rise in the ISM services survey tomorrow," DBS said in a note.
Overnight, Minneapolis Fed President Neel Kashkari said he was inclined "to push up" his policy path after a recent inflation report missed the Fed's target. Asian currencies were mostly lower while U.S. equity futures extended losses.
KEY INDICATORS:
** One-month non-deliverable rupee forward at 82.62;
onshore one-month forward premium at 14 paisa
** USD/INR March futures settled on Wednesday at 82.6150
** USD/INR March forward premium at 11.5 paisa
** Dollar index rises to 104.50
** Brent crude futures up 0.1% at $84.4 per barrel
** Ten-year U.S. note yield climbs to 4.02%
** SGX Nifty nearest-month futures down 0.3% at 17,461
** As per NSDL data, foreign investors sold a net $561.5 mln
worth of Indian shares on Feb. 28
** NSDL data shows foreign investors sold a net $2.3 mln worth
of Indian bonds on Feb. 28
(Reporting by Nimesh Vora; Editing by Dhanya Ann Thoppil)
