INDIA RUPEE-Rupee falls less than Asian peers amid risk asset rout

Kitco Media
By Reuters
Published:
Updated:
Reuters
By Anushka Trivedi MUMBAI, March 10 (Reuters) - The Indian rupee weakened on Thursday but held up better than its Asian peers, as risk assets were sold off in the region ahead of a critical U.S. jobs report. The rupee was trading at 82.0350 per dollar by 10:50 a.m. IST, compared with its previous close of 81.9750. Over the past few trading sessions, the rupee has pulled back from opening lows and kept up the trend of outperforming its Asian counterparts. The seasonality factor was at play here, with March seeing capital inflows as the final month of the fiscal year, said a private bank trader. A decline in oil prices also helped, as Brent crude futures shed 5.5% this week to $81.15 per barrel. "Overall, we expect the rupee to trade in the range of 81.50-82.50 levels in March," said Amit Pabari, managing director at CR Forex Advisors. Asian emerging market currencies dropped and equity gauges tumbled between 0.70% to 2% as U.S. stock futures extended declines on fears Friday's February jobs report could spur more aggressive interest rate hikes from the Federal Reserve. The report has become more crucial since Fed chair Jerome Powell this week made hawkish comments and said the central bank would be data-dependent. Investors will be cognizant of the fact that a big surprise in January data acted as a trigger for markets last month to price in a higher-than-expected Fed terminal rate. Markets have now raised their expectations of a 50-basis point (bps) hike to 60% after Powell's remarks, compared to 31% a week ago, as per the CME FedWatch tool. Risk assets got no reprieve from a substantial cooldown in U.S. bond yields after data overnight showed a rise in weekly jobless claims. The two-year yield declined 13 bps during the Asia trading session to 4.77%.
(Reporting by Anushka Trivedi; Editing by Janane Venkatraman)

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