The Indian rupee remained largely steady on Tuesday, mirroring the stable performance of its Asian counterparts and the relatively unchanged US bond yields as traders anticipated fresh insights from upcoming economic data later in the week.
Around 9 am UAE time, the South Asian currency stood at 83.3275 against the US dollar (22.705 against the UAE dirham), slightly up from its previous session close of 83.3625 (22.714).
Most Asian currencies maintained stability, while the dollar index also showed little movement, hovering around 106.1.
Traders anticipate the rupee to stay within the 83.25-83.40 range, with a slight inclination towards appreciation, following its gains on Monday supported by dollar inflows.
Early trading witnessed foreign banks offering dollars, which lent support to the Indian rupee, according to a foreign exchange trader at a private bank.
However, any potential gains are expected to be restrained by dollar demand from importers and modest dollar outflows, notably after the oversubscription of Vodafone Idea’s follow-on public offering by 6.36 times the shares on offer, as indicated by stock exchange data on Monday.
Despite this, foreign investors have thus far been net sellers of Indian equities and debt in April, withdrawing $1.04B, according to stock depository data.
Meanwhile, Brent crude oil futures saw a slight uptick at $87.39 per barrel, rebounding from Monday’s dip amid reduced concerns over escalation in the Iran-Israel conflict. US Treasury yields showed minimal movement on Monday ahead of crucial economic data releases.
As tensions ease over the Middle East conflict, attention will shift to the Federal Reserve’s potential timeline for policy rate adjustments.
In this context, Thursday’s US GDP data and Friday’s personal consumption expenditure inflation data are pivotal indicators to monitor.
