The central bank mellowing its hawkish tone last week has
seen futures price in a 71% possibility of the Fed holding rates
at its May meeting and about 80 basis point worth of rate cuts
in 2023. Investors will await the reading of the Fed's preferred
inflation measure, the U.S. personal consumption expenditures
price index data, due on Friday.
(Reporting by Anushka Trivedi; Editing by Sohini Goswami)
MUMBAI, March 27 (Reuters) - The Indian rupee
strengthened against the dollar on Monday, helped by
expectations of inflows and a slight improvement in risk
sentiment.
The rupee traded at 82.3175 per dollar by 11:05
a.m. IST, compared with its previous close of 82.48.
The currency last week gave up all its post-Federal Reserve
meeting gains once a selloff in Deutsche Bank shares began amid
concerns over the health of the global financial sector.
On Monday, Indian equities firmed, while U.S. and
European stock futures advanced on news that First Citizens
BancShares Inc would acquire all of Silicon Valley
Bank's (SVB) deposits and loans from the Federal
Deposit Insurance Corporation (FDIC).
Risk sentiment is "somewhat better" and inflows from likely
exporter-led dollar sales in the final week of the financial
year could see the rupee find some support, but worries about
the mood turning negative anytime persisted, said a private bank
trader.
"For the week, we expect the rupee to be range-bound between
82.20-82.50. Importers can take advantage of this to hedge
near-term exposures," said Ritesh Bhansali, vice-president at
Mecklai Financial Services.
The collapse of SVB and other mid-sized U.S.-lenders,
besides Credit Suisse's takeover by UBS, over the past two weeks
has roiled markets, with investors becoming extremely sensitive
to new developments and rushing to safe-havens.
Other Asian currencies were weaker as the dollar index gained and U.S. bond yields stayed low.
Bond yields have also reacted to a sharp repricing of Fed
terminal rate expectations lately.
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