KEY INDICATORS:
** One-month non-deliverable rupee forward at 81.77;
onshore one-month forward premium at 11 paisa
** USD/INR NSE May futures settled on Wednesday at 81.8975
** USD/INR May forward premium at 7.5 paisa
** Dollar index down at 101.06
** Brent crude futures up 0.4% at $72.6 per barrel
** Ten-year U.S. note yield at 3.33%
** SGX Nifty nearest-month futures down 0.4% at 18,093
** As per NSDL data, foreign investors bought a net $365.9 mln
worth of Indian shares on May 2
** NSDL data shows foreign investors sold a net $126.6 mln worth
of Indian bonds on May 2
(Reporting by Nimesh Vora; Editing by Varun H K)
By Nimesh Vora
MUMBAI, May 4 (Reuters) - The Indian rupee is expected
to open higher on Thursday, tracking a decline in the dollar
against Asian currencies after the U.S. Federal Reserve
signalled a pause in its rate-hike cycle.
Non-deliverable forwards indicate the rupee will
open at around 81.66-81.70 to the U.S. dollar compared with
81.8175 in the previous session.
The Fed, along expected lines, raised interest rates by 25
basis points and removed a reference from its previous statement
that additional hikes would be needed.
The guidance now is that the extent to which additional
policy firming may be appropriate will depend on how the
economy, inflation and financial markets behave in the coming
weeks and months.
"The language shift is important and signals that the bar to
justify future rate rises is now higher," ING Bank said in a
note.
"With (U.S.) lending conditions rapidly tightening in the
wake of recent bank stresses, we think this will mark the peak
for interest rates with recessionary forces set to prompt
interest rate cuts later this year."
Goldman Sachs said the Fed May outcome was supportive of
their call for a pause at the next meeting in June. In addition
to the change in guidance, it pointed to Fed Chair Jerome
Powell's remarks during his press conference that the alteration
in guidance was a “meaningful change”.
U.S. yields dropped post the Fed outcome with the 2-year
slipping to its lowest in almost a month. The dollar index is down to near 101. Asian currencies were up 0.2% to
0.9%.
In line with rest of Asia, USD/INR will be offered at open,
and then "we will just have to see if RBI is there", a spot
dealer said.
The Reserve Bank of India has being buying dollars via
public sector banks over the last two sessions, according to
traders.
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.