Economic news

Rupee Continues to Hold near 82/USD, Forward Premiums Pull Back

MUMBAI, June 28 (Reuters) - The Indian rupee barely changed to the dollar on Wednesday, unable to break away from the narrow range that has persisted over recent sessions, while premiums retreated.

The rupee was at 82.0050 to the U.S. dollar by 10:48 a.m. IST, compared with 82.0250 in the previous session. The currency has been holding around the 82 handle through this week.

"Over the past eight trading sessions, USD/INR has been remarkably calm on an intraday basis, with the daily price range now less than 10 paise," said Anindya Banerjee, head of research - FX and interest rates at Kotak Securities.

Banerjee reckons 81.90 and 82.20 are the near-term support and resistance level for USD/INR.

The rupee was unmoved by the decline in most Asian currencies following U.S. data that suggested more Federal Reserve rate hikes were likely.

New orders for U.S.-manufactured capital goods unexpectedly rose in May, data which analysts said, point towards robust investment demand. Meanwhile, a measure of U.S. consumer confidence rose in June to its highest level in almost one-and-a-half years.

"U.S. data resilience despite the most aggressive Fed tightening in 40 years is one of the quirks of today's market," DBS Research said in a note.

"It does not look like the U.S. is slipping into a recession any time soon."

U.S. yields rose and equities rallied. Tracking the move higher on U.S. yields, rupee forward premiums pulled back from one-month highs. The 1-year USD/INR implied yield was down to 1.84%.

More U.S. data are due this week, with weekly jobless claims data due on Thursday and core PCE print on Friday.

Reporting by Nimesh Vora; editing by Eileen Soreng

Source: Reuters


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