Rupee Today: Rupee ended with gains reversing early losses
The rupee ended Wednesday with gains, reversing early losses as traders remained cautious about placing large bets ahead of US inflation data, which markets will scrutinise for guidance on how steeply the Federal Reserve will raise interest rates in coming months.
Bloomberg showed the rupee was last changing hands at 79.5188 per dollar, after a weak opening of 79.5563, compared to its previous close on Monday of 79.6550 against the greenback.
PTI reported that the rupee gained 12 paise to close provisionally at 79.51 against the US dollar.
At the interbank forex market, the Indian currency opened at 79.59 against the greenback and finally settled provisionally at 79.48, registering a rise of 15 paise over its previous close, according to PTI.
During the session, the rupee witnessed an intra-day high of 79.41 and a low of 79.59 against the American currency. In the previous session on Monday, the rupee had closed at 79.63 against the US dollar.
Indian financial markets were closed on Tuesday on account of 'Muharram'.
The rupee has held below the 80 level, amid expectations that the Reserve Bank of India will not allow it to depreciate further from the psychologically important mark.
“USDINR spot closed 14 paise lower at 79.52, in a day of lackluster trading. Some exporter flows and oil demand kept the pair steady. Speculators were on sidelines ahead of the US inflation report, later in the evening," said Anindya Banerjee, Vice President for Currency Derivatives & Interest Rate Derivatives at Kotak Securities.
"Over the near term, we expect USDINR to remain rangebound between 79.00 and 80.00 levels on spot,” added Kotak's Vice President.
The greenback was broadly steady, having paused a bit from a retreat that began in the middle of July.
"All eyes are on US CPI," Carol Kong, a currency strategist at Commonwealth Bank of Australia, told Reuters.
"Currencies have been quiet this week, and barring a major news event, we don't expect the dollar to move out of its range before the data."
Traders expect the reaction to turn on the core inflation figure.
"The Indian rupee outperforms among Asian currencies amid corporate dollar inflows and lacklustre global cues ahead of US inflation data," Dilip Parmar, Research Analyst at HDFC Securities, told PTI.
The market is pricing in a cool-down in US inflation from the previous reading from 9.1 per cent to 8.7 per cent year-on-year.
"However, the US Fed remains hawkish and wants to see a clear decelerating trend before slowing the pace of tightening before the next FOMC meeting on September 21, which will bid well for the dollar," Mr Parmar said.