By Jaspreet Kalra
MUMBAI, – The Indian rupee weakened on Monday pressured by dollar demand from foreign banks and weakness in Asian currencies amid concerns that U.S. rate cuts this year will be delayed.
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The rupee was at 83.41 against the U.S. dollar as of 10:05 a.m. IST, down from its close at 83.34 in the previous session.
The dollar index was down 0.3% at 105.6 after the yen recovered from a fall below the 160-per-dollar mark in trading thinned by a holiday in Japan.
Most Asian currencies were lower with the Indonesian rupiah down 0.2% and leading losses.
Foreign banks’ bids to buy dollars also weighed on the rupee in early trading, a foreign exchange trader at a state-run bank said. “Think 83.45 is the maximum weakness we will see,” the trader said.
A hawkish repricing of the U.S. rate cut timeline following stronger-than-expected inflation and economic activity data has boosted U.S. bond yields and the dollar.
“Despite external pressures, the rupee is expected to maintain its resilience … may gradually strengthen to around 83.20 to 83.00,” Amit Pabari, managing director at FX advisory firm CR Forex said.
Focus this week will be on the Federal Reserve’s policy decision due on Wednesday.
The central bank is widely expected to keep rates unchanged but investors will pay close attention to Chair Jerome Powell’s remarks for cues on policymakers’ thinking about the future path of policy rates.
Markets are currently pricing in a singular rate cut by the Fed in 2024, a sharp reduction from the six rate cuts expected early in the year, according to CME’s FedWatch tool.
This article was generated from an automated news agency feed without modifications to text.
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