The Indian rupee is expected to stay flat at the open on Wednesday as the dollar index rises amid weak risk. From 82.8275 in the previous session, non-export rupee futures point to a slightly weaker USD/USD open.
As reported by REUTERS, a forex trader said, “If you take into account the current level, it is to be expected that incremental moves higher (on USD/INR) will be quite slow and measured.”
As a few market participants believe, the rupee has experienced repeated support around 82.80-82.85 in recent sessions and this was largely due to intervention by the Reserve Bank of India.
The dollar index, aided by the fall in US stock markets, climbed up to 0.5% on Tuesday. The risk sentiment was hurt by China’s poor trade figures as well as a downgrade of US mid sized banks
Investors await US economic data on Thursday. China released economic data on Wednesday that pointed to the risk of deflation.
As quoted by Reuters, Srinivas Puni, director of QuantArt Market Solutions, said, “Unless the upcoming U.S. inflation data is way different from consensus, USDINR could stick to the current range for some more time.”
The Reserve Bank of India’s monetary policy decision will take place on Thursday at 10:00 a.m. In view of recent food price increases, the ECB is not expected to alter its interest rate policy stance at this time; however, continued high rhetoric will be retained.
