MUMBAI, March 8 (Reuters) - The Indian rupee declined
against the dollar on Wednesday amid worries over the U.S.
interest rate outlook, but the losses were contained by
exporters and speculators.
The rupee closed at 82.0550 to the U.S. dollar,
down from 81.91 in the previous session. The local currency had
fallen to an intraday low of 82.29.
The 50-day and 100-day USD/INR moving average is around the
82.25 level.
The dollar offers in the "cluster" of 82.20-82.30 ensured
that the opening upside momentum (on USD/INR) "subsided", a spot
trader at a private sector bank said. The "best guess" for the
offers will forward dollar sales by exporters and new positions,
he said.
In line with past rallies in the dollar, the rupee's losses
were lesser than its Asian peers, traders pointed out.
The Korean won and Malaysian ringgit declined more than 1%
each, while the Indonesian rupiah dropped 0.6%, following
hawkish comments by U.S. Federal Reserve Chair Jerome Powell.
Powell opened the door to a 50 basis points hike by telling
U.S. lawmakers that in the wake of recent economic data, the
speed and size of future hikes may need to increase. His comments also drove the dollar to scale multi-month
highs against most other major currencies, with the dollar index rising to a 3-month high of 105.88. Futures now reckon that it is more likely that the Fed will
revert to a 50 bps rate hike at this month's meeting, an outcome
that looked highly unlikely about a month back.
"Whether the FOMC hikes by 25bp or 50bp, we expect that the
median dot will rise by 50bp at the March meeting to show a peak
rate of 5.5-5.75% in 2023," Goldman Sachs said in a note.
The bank raised its forecast of the peak rate by 25 bps to
5.5-5.75%.
The rupee forward premiums fell, tracking an overnight jump
in U.S. yields. The 1-year implied yield fell 6 bps to 2.12%.
(Reporting by Nimesh Vora)
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