Rupee Opens Flat Against US Dollar
The Indian Rupee opened 1 paise stronger against the US Dollar at Rs 85.47 on Monday, following its close at Rs 85.48 a dollar on Friday. The currency is expected to trade within the range of Rs 85.25 to Rs 85.75 throughout the day, said Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP.
Exporters should sit tight while importers may start hedging for the near term, he advised. "The dollar wallowed near its lowest in nearly four years at 97.21 as market optimism over US trade deals bolstered bets for earlier Fed Reserve rate cuts," Bhansali noted.
The greenback also languished near a four-year low against the Euro and Sterling, and more than a decade trough against the Swiss Franc, as Washington and China moved closer to a tariff agreement, he said.
Investors have interpreted last week's testimony by Jerome Powell to the US Congress as dovish, with Powell indicating that rate cuts were likely if inflation does not spike this summer due to tariffs. "Bets of at least one quarter point reduction in September have risen to 92.4% according to CME Group's Fed watch tool, up from about 70% a week earlier," Bhansali added.
Japan's factory output rose less than expected in May amid tariff concerns, with the Yen stable at 144.13. Meanwhile, India's Gift Nifty showed a bullish outlook, rising by 30 points. "As S&P and Nasdaq closed above record highs and Dow Jones was up on Friday, Nikkei rose by 1.71% while Hang Seng was down 0.47% and China by 0.47% this morning," Bhansali observed.
Brent oil prices fell to $66.52 a barrel on prospects of more OPEC+ supply in August and easing risks in the Middle East. Among currencies, the Chinese Yuan was up by 0.11% to 7.2634, the Indonesian Rupiah was down 0.24% to 16,206, and the South Korean Won was up 0.68% to 1,355.
The Indian Rupee rose to Rs 86.4750 on Friday as selling for the HDB Financial IPO, which was oversubscribed 17 times, concluded.
The Rupee moved between Rs 85.41 to Rs 85.66 on that day and opened at Rs 85.47 this morning with an expectation of trading within Rs 85.25 to Rs 85.75 during the day. Bhansali highlighted potential outflows due to JSW Paints buying Akzo Nobel India and the HDB Financial oversubscription moving out as the allotment is announced.
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