By Anushka Trivedi
MUMBAI, March 29 (Reuters) - The Indian rupee eased
against the U.S. currency on Wednesday, with its Asian peers
mixed amid a rebound in Treasury yields that supported the
dollar index.
The rupee ended at 82.3375 per dollar, against its
previous close of 82.1875.
Traders said the drop was due to, among other factors,
state-run banks buying dollars and the possible squaring of
positions by speculators who were short USD/INR to take
advantage of the fiscal year carry forward.
The spot date for USD/INR changed from March 31 to April 3.
Asian currencies were mixed as the dollar index held
steady near the 102.50 level.
The 2-year U.S. bond yield rose for the third
straight day, to trade near 4.10%. Abating worries around the
U.S. banking sector has prompted traders to re-look at their
expectations for the Federal Reserve's rate path.
Encouraging the need for a re-look was a survey overnight
that showed U.S. consumer confidence unexpectedly increased in
March despite the recent financial market turmoil, although
Americans continued to expect inflation to remain elevated over
the next year.
"The chances of a more hawkish tone in upcoming Fedspeak
might have increased after a few days of market calm and
investors scaling back ultra-dovish expectations," ING analysts
said in a note.
The odds of whether the Fed will opt for a rate hike or hold
fire at its meeting in May were almost even, after having leaned
slightly more towards a pause since last week. Markets expect the Fed funds rate to be near 4.264% by the
end of 2023 after falling to below 4% at the height of the
banking crisis. Tracking U.S. yields, rupee far forward premiums initially
fell, with the 1-year implied yield down to a
near two-week low at 2.35%.
India's financial markets will be shut on Thursday for a
local holiday.
(Reporting by Anushka Trivedi; Editing by Savio D'Souza)
anushka.trivedi.thomsonreuters.com@reuters.net))
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.