Rupee Gives Up Gains To Open Weaker Against US Dollar
Rupee is expected to trade within the range of Rs 85.00 to Rs 85.75 for the day.
The Indian rupee opened 7 paise weaker at Rs 85.47 against the US dollar on Tuesday, compared to its closing value of Rs 85.40 a dollar on Monday.
Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, indicated that the rupee is expected to trade within the range of Rs 85.00 to Rs 85.75 for the day.
Bhansali advised exporters to hedge at levels of Rs 85.70 to Rs 85.75, while importers might consider waiting to hedge closer to Rs 84.25 to Rs 84.50.
Asian markets showed positive movement on Tuesday, with US treasury yields stabilising, providing some respite for the US dollar. Last week's downgrade of US sovereign credit by Moody's due to concerns over the nation's growing $36 trillion debt led to a sell-off in treasuries on Monday, which later stabilised during Asian trading hours, Bhansali noted.
The dollar index rose to 100.35 after nearing 100 the previous day, while the US 10-year yield fell to 4.4446%, a drop of nearly 10 basis points from the previous day's high.
Bhansali noted that Moody's downgrade was a temporary shock and not significant in the larger context, as it was not new information. With limited indications of imminent trade deals, markets are awaiting further direction. All three major US indices closed higher on Monday after initially falling by more than 1%.
In other currency movements, the British pound remained strong at 1.3363 against the dollar, the euro slightly declined to 1.1244, and the Japanese yen remained stable at 144.85.
Brent oil prices were steady at $65.46 per barrel, as signs of a faltering US-Iran deal eased some oversupply concerns. However, the prospects of negotiations towards a Russia-Ukraine ceasefire weighed on sentiment, Bhansali said.
Asian stock indices showed positive movement, with the Nikkei up by 0.49%, Hang Seng by 0.77%, and China by 0.19%.
