By Nimesh Vora
MUMBAI, April 26 (Reuters) - The Indian rupee was down
slightly against the U.S dollar on Wednesday, with losses capped
by the measured response of Indian equities to the selloff on
Wall Street and speculative interest, traders said.
The rupee was trading at 81.9525 to the dollar by
11:00 a.m. IST, slightly below 81.9125 in the previous session.
The local currency had opened at around 81.99.
Losses in India Asian equities were measured, following the
overnight selloff on Wall Street. The Nifty 50 Index was little
changed while shares in South Korea, China and Australia were
down only about 0.1% to 0.3%.
Rupee is managing to keep its head above 82, thanks to how
India and rest of Asian equities are doing and to overall dollar
selling interest around the 82-level, a spot trader at private
sector bank said.
"It could be that rupee actually manages to inch up later in
today's session."
Worries over the U.S. banking sector resurfaced, after First
Republic Bank shares nosedived to a record low after the bank
disclosed a $100 billion plunge in deposits. A source told
Reuters the bank is considering asset sales.
This drove demand for safe havens like U.S. bonds and the
dollar. The 2-year U.S. bond yield dropped more than 20 basis
points overnight, falling back below 4%.
"Events at First Republic Bank highlighted that beneath the
recent calm, there could still be banking sector stresses," ANZ
Research said in a daily note to clients.
The rupee forward premiums rose, tracking the overnight fall
in U.S. yields. The 1-year implied yield at
2.35%, up four basis points from the previous session.
(Reporting by Nimesh Vora; Editing by Varun H K)
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