Rupee firms as dollar remains on defensive ahead – Money News
By Jaspreet Kalra
MUMBAI (Reuters) – The Indian rupee closed stronger on Tuesday, hitting a one-week peak, as expectations of a U.S. Federal Reserve price cut stored the dollar weak in opposition to most currencies.
The rupee closed at 88.0525 per dollar, up 0.18% on the day after touching 88.02, its strongest since September 9.
Most Asian currencies additionally firmed, whereas the dollar slipped to a more than two-month low in opposition to the sterling and the euro. The dollar index was final down 0.3% at 97.
The Fed’s coverage choice is due post-Indian market hours on Wednesday, the place a 25-basis-points price cut is absolutely priced in by money markets. Analysts attribute the dollar’s weak spot to investor positioning heading into the occasion.
The rupee regained some footing after hitting its all-time low of 88.4550 final week amid persistent worries over the influence of steep U.S. tariffs on each commerce and overseas portfolio flows.
Foreign buyers have offered about $1 billion of native shares over September up to now on a web foundation, taking the year-to-date outflow tally to about $16 billion.
On the day, India’s benchmark equity indexes, the BSE Sensex and Nifty 50 every closed 0.7% greater. For the 12 months up to now, the indexes have gained about 5%-7% however are lagging well-behind the 23% rise in MSCI’s gauge of Asian equities excluding Japan
“Reserve Bank of India’s intervention is expected to cap USD/INR around 89.0 amid external headwinds. However, the risk of further weakness persists if India fails to negotiate tariff levels lower,” analysts at ING mentioned in a observe.
The Indian central bank has stepped up its presence within the offshore non-deliverable ahead market to assist the rupee, Reuters reported earlier.
India and the United States are slated to carry commerce talks on Tuesday after U.S. President Donald Trump struck a more conciliatory tone in statements final week and expressed optimism that the 2 international locations might finalise a commerce deal.
(Reporting by Jaspreet Kalra; Editing by Nivedita Bhattacharjee)
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