Non-deliverable forwards indicate the rupee will open at around 82.10-82.12 to the U.S. dollar compared with 82.09 in the previous session. With the dollar doing well despite the weak U.S. data, USD/INR will likely be "slightly bid" at open, a spot trader said. The respect for the recent high (on USD/INR) of 82.15 and "decent" resistance at 82.25-82.30 will, however, keep the upside in check at least in the initial part, he added. Asian currencies were down between 0.3% and 0.6%, weighed by the dollar recovery against major peers. The offshore Chinese yuan dropped to 6.96 to the dollar.
The dollar index on Thursday had the best session in nearly two months despite data supporting current expectations that the U.S. Federal Reserve is done with rate hikes. The number of Americans filing new claims for unemployment benefits jumped to a 1-1/2-year high last week, pointing to cracks in the labour market. Further, the U.S. producer price index rose 2.3% in April, the smallest year-on-year rise since January 2021 and following a 2.7% advance in March.
The dollar's strength, despite the data, was put down by analysts to safe-haven demand amid renewed worries over U.S. regional banks. Shares of a U.S. regional lender, PacWest Bancorp, plunged after it reported its deposits fell 9.5% last week and that it had posted more collateral to the Fed to boost its liquidity. Renewed concerns regarding the state of some U.S. regional banks is pushing up demand for less risky investments, ANZ said in a morning note. The S&P 500 Index and the Dow Jones Industrial Average dropped overnight.
KEY INDICATORS:
** One-month non-deliverable rupee forward at 82.20;
onshore one-month forward premium at 10.25 paise
** USD/INR NSE May futures settled on Thursday at 82.1450
** USD/INR May forward premium at 5.5 paise
** Dollar index at 102.02
** Brent crude futures down 0.8% at $74.4 per barrel
** Ten-year U.S. note yield at 3.38%
** SGX Nifty nearest-month futures down 0.4% at 18,279
** As per NSDL data, foreign investors bought a net $279.9mln
worth of Indian shares on May. 10
** NSDL data shows foreign investors bought a net $99.1mln worth
of Indian bonds on May. 10
(Reporting by Nimesh Vora; Editing by Janane Venkatraman)
