The Indian rupee, off its worst weekly performance in more than a month, is expected to rally on Monday, helped by lower dollar index and near-term Treasury yields after US jobs figures increased less than expected.
Non-deliverable futures indicate that the Rupee will open around 82.60-82.62 for the US Dollar, down from 82.74 in the previous session.
Last week, the rupiah was rattled by concerns that US rates may have to rise more than expected after private payrolls figures rose more than expected in June.
However, data released on Friday showed the number of non-farm payrolls rose by 209,000 last month, lower than the 225,000 expected by economists. In addition, job creations for April and May have been revised downwards.
Compared to the private payrolls numbers, the non-farm payrolls number will be a relief for the rupee and other Asian currencies, a currency trader said.
“With the jobs data behind us, it’s now the (US) inflation data. A move towards 83 remains in plain sight.”
The dollar index fell 0.9% on Friday, its worst session in nearly four months, after jobs data showed the U.S. economy added the fewest jobs in two-and-a-half years in June, while US two-year yields fell back below 5%.
The jobs data, however, did not affect expectations that the US Federal Reserve will almost certainly raise rates by 25 basis points (bps) at its July 25-26 meeting.
That 25 basis point rate hike is on the cards as June inflation data is likely to be “higher than the Fed would like,” ANZ Research said in a note.
US inflation data is due Wednesday. Economists polled by Reuters expect core CPI to rise 0.3% month-on-month and 5% year-on-year.
KEY INDICATORS
** One-month Rupee non-deliverable forward rate at 82.71; one-month domestic forward premium at 8 paisa.
**USD/INR NSE July futures settled at 82.7850 on Friday.
** USD/INR July futures premium at 5.5 paisa
** Dollar index at 102.40
** Brent down 0.4% to $78.1 a barrel
** The ten-year US bond yield is 4.08% and the two-year bond yield is 4.94%.
**According to NSDL data, foreign investors bought $343.6 million worth of Indian stocks on July 6.
**According to NSDL data, foreign investors bought $87.8 million worth of Indian bonds on July 6 (report by Nimesh Vora; edited by Savio D’Souza).
2023-07-10 02:51:24
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