The non-deliverable forwards indicate the rupee will open around 81.96-82.00, compared with 81.9725 in the previous session.
The USD/INR pair on Monday once again took support at 81.80. "U.S. yields and dollar index are up and Asian currencies are mostly weaker, lending an upward bias (on USD/INR)," a spot trader said. However, it is "safe to assume" that the pair will run into "broad offers" from speculators and exporters near the 82 level, he added. The dollar index on Monday hit the highest in over a month and U.S. yields climbed amid near certainty that the Fed will raise rates at its May meeting.
Futures are pricing in a near-90% chance of a 25 basis points rate hike in May following comments by a Fed official said that the U.S. central bank "hasn't made much progress" in returning inflation to its 2% target. The 2-year U.S. yield rose to 4.20% overnight, highest since March 22.
U.S. data released on Monday supported another Fed rate hike. Confidence among U.S. single-family homebuilders improved for a fourth straight month in April, while the New York manufacturing index rose into positive territory.
U.S. housing starts and building permits are due Tuesday. Overall, the recently upbeat data "have helped to offset the pessimism" on the dollar from the softer U.S. inflation data, DBS Group said in a note. The Korean won, the Indonesian rupiah were down 0.4% each. Asia risk appetite was slightly weak.
KEY INDICATORS:
** One-month non-deliverable rupee forward at 82.08;
onshore one-month forward premium at 11.5 paise
** USD/INR NSE April futures settled on Monday at 82.0375
** USD/INR April forward premium at 3 paise
** Dollar index down at 102.05
** Brent crude futures up 0.2% at $84.9 per barrel
** Ten-year U.S. note yield at 3.59%
** SGX Nifty nearest-month futures down 0.2% at 17,731
** As per NSDL data, foreign investors bought a net $98.1mln
worth of Indian shares on Apr. 14
** Foreign investors bought a net $93.1mln worth of Indian bonds
on Apr. 14, data showed
(Reporting by Nimesh Vora; Editing by Sohini Goswami)
