Indian Rupee Expected to Open Slightly Higher
The Indian rupee is forecasted to start the day on a marginally positive note, supported by gains in other Asian currencies. However, traders caution that hedging activities by importers might cap the local unit’s upward momentum.
Opening Forecasts and Asian Currency Trends
Non-deliverable forwards suggest that the rupee against the U.S. dollar (USDINR) is expected to commence trading at approximately 83.31-83.32, displaying a mild strength from its previous close of 83.3425. Asian currencies, including the Korean won, have experienced gains ranging from 0.1% to 0.6%.
Market Sentiment and Technical Analysis
Market sentiment remains optimistic, anticipating a continuation of the “risk-on” trend, possibly leading the rupee to test the 83.20 mark. However, traders emphasize the importance of monitoring importer activities, which could impede the rupee’s ascent.
Focus on U.S. Economic Data and Fed Policy
Attention in the market is now shifting towards upcoming U.S. economic indicators, particularly Thursday’s advanced GDP data and Friday’s PCE inflation figures. Investors are keen to assess the potential impact on Federal Reserve policy and the timeline for interest rate adjustments.
Key Indicators and Market Insights
- Forward Exchange Rates: One-month non-deliverable rupee forward stands at 83.38 with an onshore forward premium of 8.25 paisa.
- Dollar Index: Currently at 105.6, the dollar index is expected to hold support at 105, influenced by upcoming U.S. economic data.
- Brent Crude Oil Futures: Despite a marginal decline, Brent crude futures remain buoyant at $88.3 per barrel, supported by weakness in the dollar and positive Eurozone business activity.
- Bond and Equity Flows: Foreign investors sold a net $314 million worth of Indian shares on April 22, while buying a net $113.2 million worth of Indian bonds, as per NSDL data.
In summary, while the Indian rupee anticipates a modest opening, market participants are closely monitoring global economic developments and central bank policies for further cues.