Due to the rebound in the dollar index and a drop in Asian rivals, the Indian rupee is anticipated to open weaker on Tuesday. The rupee is expected to open Monday at approximately 82.85 to the dollar, down from 82.7425 on Monday, according to non-deliverable forwards.
Following the release of the U.S. jobs report, the dollar index increased in Asia and has since regained a significant portion of those losses. The offshore Chinese yuan dropped to 7.2250 to the dollar, and Asian currencies fell between 0.2% and 0.6% overall.
Through public sector banks, the Reserve Bank of India has often intervened to stop the rupee from falling below the range of 82.80 and 83.00. The Fed Governor Michelle Bowman’s remarks that more interest rate increases will probably be required to bring inflation down to the US Federal Reserve’s target of 2% benefited the dollar.
For the Fed’s outlook, the U.S. inflation data due on Thursday is crucial. According to economists surveyed by Reuters, the core consumer price index would increase by 4.8% year and by 0.2% month over month.
Most policymakers believe the policy rate will need to be kept tight for some time to get inflation back to goal, according to ANZ, and the Fed is concerned of upside risks to rising inflation given the continued excess demand for labour.
