After spending the most of the morning in a narrow range as traders awaited new signals for directional momentum, the Indian rupee finished Thursday’s trading session largely unchanged. The rupee scarcely moved from its previous level of 83.1225 to conclude at 83.1150 vs the US dollar. The local unit experienced a 0.06% weekly loss .Due to a local holiday, Indian marketplaces are closed on Friday.
The rupee saw a strong rally to 82.77 earlier this month, but it has since lost most of its gains due to stock outflows and a general increase in the strength of the dollar, along with a reduction in the aggressive expectations of a U.S. rate decrease. According to a foreign exchange trader at a private bank, there is little chance of further advance above 83 in the foreseeable future, but the downside is also well capped around 83.30–83.35.According to CME’s Fed Watch tool, investors are now pricing in a 56% chance of the US Federal Reserve holding rates unchanged in March, up from roughly 44% a week earlier.
“Conviction views can be dangerous in the current investment environment, which we see to be highly mixed,” ING Bank stated in a note. A Reuters poll predicts that U.S. GDP data for the October–December quarter, which is scheduled later today, will show 2% year-over-year growth, down from 4.9% in the previous quarter. Investors will be watching this data closely. Personal consumption expenditure inflation data, the Fed’s favored inflation indicator, will be released on Friday after the GDP report.
