By Nimesh Vora
MUMBAI, March 15 (Reuters) - The Indian rupee failed to
hold on to its positive opening versus the U.S. currency on
Wednesday, slipping below 82.50 on dollar demand from foreign
banks and importers, traders said.
The rupee last traded at 82.5950 to the dollar,
compared with 82.49 in the previous session. The local currency
had opened at 82.31.
The rupee struggled after the open on dollar demand from
foreign banks and from a large public sector bank, according to
traders. Foreign banks were likely buying dollars for their
custodial and offshore clients and the public sector banks on
behalf of importers, traders said.
The rupee's Asian peers mostly fared well on Wednesday
following the U.S. inflation data. The data was broadly in line
with expectations, making investors wager on a 25 basis points
rate hike by the U.S. Federal Reserve next week.
On-target inflation data and receding jitters over contagion
in the banking sector cooled expectations regarding the
possibility of a 50 basis points rate hike, Amit Pabari,
managing director at CR Forex, said.
The U.S. rates markets continued to exhibit significant
volatility, a development that is likely to be negative for
rupee and most Asian currencies.
The 2-year U.S. yield on Tuesday held a near-60 basis points
range on Tuesday, slipping to near 3.80% at one point. It
reached a high of 4.40% on Wednesday.
Indian equities, like the rupee, were on the defensive after
the open. The Nifty 50 index fell below 17,000 to its lowest
level since October.
Meanwhile, India's merchandise trade deficit in February
stood at $17.4 billion, data released on Wednesday showed. That
was marginally lower than the $17.8 billion recorded in the
previous month, and below the $19 billion forecast in a Reuters
poll.
(Reporting by Nimesh Vora; Editing by Varun H K)
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