The Indian rupee closed weaker against the U.S. dollar on Monday after the dollar index rose to an eight-week high.
This comes after a robust U.S. jobs report and comments from Federal Reserve Chair Jerome Powell that markets have to wait beyond March for the central bank to cut interest rates.
The local currency weakened 13 paise to close at Rs 83.06 against the U.S dollar. It closed at Rs 82.93 on Friday, according to Bloomberg data.
"Steady U.S. unemployment at 3.7% and faster wage growth signal a tight labour market, raising inflation concerns. The dollar index and 10-year US Treasury yield rallied, throwing a spanner in the plans of traders that were betting on March or May for a rate cut," said Kunal Sodhani, vice president of Shinhan Bank.
"For dollar/rupee, Rs 82.90 will act as a support and Rs 83.15 as a resistance," he said.
"The upcoming RBI policy shall remain in focus, with narket expectations remaining biassed towards an unchanged stance. Overall, the market sentiment favours a downward trend for the USDINR pair, with expectations of it converging towards the range of Rs 82.50–82.80 in the near term," Amit Pabari, managing director at CR Forex Advisors.
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