Rupee Opens Little Changed After Fed Powell's Slightly Hawkish Speech
Rupee depreciated 1 paise to open at Rs 83.81 against the US dollar. It had closed at Rs 83.80 on Monday, according to Bloomberg data.
The rupee opened little changed on Tuesday, tracking the movement of the dollar index following Federal Reserve Chair Jerome Powell's slightly hawkish speech.
The Indian currency depreciated 1 paise to open at Rs 83.81 against the US dollar. It had closed at Rs 83.80 on Monday, according to Bloomberg data.
The dollar index inched up 0.02% to 100.7960, while Brent crude prices fell 0.29% to $71.77 per barrel.
"The dollar gained after Powell pushed back overnight against bets on more supersized rate cuts," said Anil Kumar Bhansali, head of Treasury and executive director at Finrex Treasury Advisors LLP.
"Powell adopted a more hawkish tone in his speech, indicating a preference for quarter-point rate cuts over larger ones. This led traders to reduce expectations of a 50 basis-point rate cut from 53.3% to 35.4%," Bhansali said.
He also said that foreign portfolio investors sold the Indian rupee against the dollar, resulting in an outflow of Rs 9,800 crore from equities as funds moved from Indian markets to the Chinese market. Additionally, oil companies and national banks were dollar buyers for the month-end, while the Reserve Bank of India intervened by selling dollars at Rs 83.80 to protect the rupee, he added.
Bhansali expects the rupee to trade in Rs 83.65-83.90 range on Tuesday. He advises exporters to sell on upticks, as the RBI protects the Rs 83.99 level, and importers to buy on dips.
