On Monday, the rupee rises against the dollar on optimism of a resurgence in Chinese demand, despite global recession concerns.
According to Bloomberg, the rupee was last trading at 82.8038 per dollar in early trade, down from 82.8687 on Friday.
Because of deteriorating economic indicators, the mood isn’t improving as the year comes to a close.
According to surveys issued this week, European, Japanese, and American business activity fell in December, supporting demand for the safe-haven dollar.
China’s business confidence has also dropped to its lowest point since the World Economics Survey began collecting data in January 2013.
As Asian markets began the final full trading week of 2022 on a shaky note, the probability of future interest rate hikes, as signalled by major central banks, dampened Christmas cheer.
Last week, the Federal Reserve and the European Central Bank (ECB) boosted interest rates and announced more increases. The Bank of Japan (BOJ), which meets on Monday and Tuesday, is rumoured to be pondering changing its current ultra-dovish stance.
According to a report from the news agency Kyodo on Saturday, Japan is proposing to change its 2% inflation target policy, potentially giving the central bank more discretion.
A change in the Japanese government’s and the BOJ’s joint statement on the latter’s inflation target might lead to a change in the BOJ’s ultra-loose monetary policy, which drove up the yen’s value on Monday.
“Where there’s smoke, eventually there is fire,” Rodrigo Catril, a Strategist at National Australia Bank in Sydney, told Reuters.