KEY INDICATORS:
** One-month non-deliverable rupee forward at 82.04;
onshore one-month forward premium at 10.5 paisa
** USD/INR NSE May futures settled on Wednesday at 82.0950
** USD/INR May forward premium at 6.5 paisa
** Dollar index at 101.46
** Brent crude futures up 0.5% at $76.8 per barrel
** Ten-year U.S. note yield at 3.43%
** SGX Nifty nearest-month futures up 0.2% at 18,395
** As per NSDL data, foreign investors bought a net $243.9 mln
worth of Indian shares on May 9
** NSDL data shows foreign investors sold a net $114.9 mln worth
of Indian bonds on May 9
(Reporting by Nimesh Vora; Editing by Varun H K)
By Nimesh Vora
MUMBAI, May 11 (Reuters) - Indian rupee is poised to
open higher on Thursday, after largely in-line U.S. inflation
data made it more likely the U.S. Federal Reserve will not raise
rates at its next meeting.
Non-deliverable forwards indicate rupee will open
at around 81.94 to the U.S. dollar compared with 81.9850 in the
previous session. Asian peers were mostly higher, but the
offshore Chinese yuan weakened to 6.9450 to the dollar.
"We should open a bit lower (on USD/INR), but difficult to
see any major move," a spot trader at a private sector bank
said.
"I am watching the yuan and that combined with how (USD/INR)
has been, downside looks limited."
The dollar dropped against its major peers, U.S. yields
dropped and U.S. equities rose after the U.S. consumer inflation
rate rose by 4.9%, the lowest in two years and marking the tenth
straight month of decline. Economists polled by Reuters had
expected a 5% print.
The month-on-month and the year-on-year core inflation rate
rose 0.4% and 5.5%, matching expectations.
"In our view, this is an encouraging print for the Fed,"
BofA Securities said in a note.
"This report should keep the Fed comfortable with a hold in
June. However, note that we have one more jobs report and one
more inflation print before the June meeting."
The Fed meets on June 13-14, while U.S. May jobs data is due
on June 2 and inflation on June 13.
Odds of a rate hike at the meeting dropped further, with
futures now pricing in just a 6% chance that the Fed will raise
rates. The 2-year U.S yield dropped to near 3.90% and the inversion
between the 2-year and 10-year narrowed to around 50 basis
points.
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