“,”elements”:[]}],”thumb_big”:”https://etimg.etb2bimg.com/thumb/msid-116272957,imgsize-56622,width-1200,height=765,overlay-etauto/industry/rupee-weakness-to-persist-on-rally-in-dollar-us-yields.jpg”,”thumb_small”:”https://etimg.etb2bimg.com/thumb/img-size-56622/116272957.cms?width=150&height=112″,”time”:”2024-12-13 09:06:43″,”is_live”:false,”prime_id”:0,”highlights”:[],”highlights_html”:””,”also_read_available”:false,”body”:”
The RBI’s action in the swap market has distorted the dollar/rupee forward premiums, with near maturities yielding more than far maturities.“>
The Indian rupee will have to contend with the higher run in the U.S. dollar and yields at the open on Friday, which may push the local currency to a new all-time low.
The one-month non-deliverable forward indicated that the rupee will open at 84.87-84.88 to the dollar, compared with 84.8575 in the previous session and near the all-time low of 84.88 hit on Thursday.
The dollar index climbed past the 107 handle in the New York session on Thursday to its highest in more than two weeks. The 10-year U.S. Treasury yield rose about six basis points.
Asian currencies declined on Friday, with the offshore Chinese yuan dipping past 7.28 to the dollar. Comments from a top trade adviser to U.S. President-elect Donald Trump warning China against currency manipulation likely weighed on the yuan.
A weaker yuan alongside “the sweeping” problems that the rupee is facing, “will likely result in one more busy day” for the Reserve Bank of India (RBI), a currency trader at a bank said.
To support the rupee, India’s central bank has been selling dollars in the spot market and conducting buy/sell swaps. The latter ensures that the intervention in the spot market does not have an impact on rupee liquidity and on forex reserves.
The RBI’s action in the swap market has distorted the dollar/rupee forward premiums, with near maturities yielding more than far maturities.
The run up in the dollar and U.S. yields is despite data further reinforcing high expectations that the Federal Reserve will cut rates next week.
U.S. initial jobless claims increased last week and U.S. producer inflation data indicates that the Fed’s favoured inflation gauge is likely to show a mild reading for November.
“,”next_sibling”:[{“msid”:116271950,”title”:”Forced to hide face in global meets due to high number of road accidents: Nitin Gadkari”,”entity_type”:”ARTICLE”,”link”:”/news/industry/forced-to-hide-face-in-global-meets-due-to-high-number-of-road-accidents-nitin-gadkari/116271950″,”link_next_mobile”:”/news/industry/forced-to-hide-face-in-global-meets-due-to-high-number-of-road-accidents-nitin-gadkari/116271950?next=1″,”category_name”:null,”category_name_seo”:”industry”}],”related_content”:[],”seoschemas”:false,”social_share”:{“fb”:”/news/industry/rupee-weakness-to-persist-on-rally-in-dollar-us-yields/116272957?utm_source=facebook&utm_medium={{DEVICE_TYPE}}”,”x”:”/news/industry/rupee-weakness-to-persist-on-rally-in-dollar-us-yields/116272957?utm_source=twitter&utm_medium={{DEVICE_TYPE}}”,”whatsapp”:”/news/industry/rupee-weakness-to-persist-on-rally-in-dollar-us-yields/116272957?utm_source=wapp&utm_medium={{DEVICE_TYPE}}”,”linkdin”:”/news/industry/rupee-weakness-to-persist-on-rally-in-dollar-us-yields/116272957?utm_source=linkedin&utm_medium={{DEVICE_TYPE}}”,”telegram”:”/news/industry/rupee-weakness-to-persist-on-rally-in-dollar-us-yields/116272957?utm_source=telegram&utm_medium={{DEVICE_TYPE}}”,”copy”:”/news/industry/rupee-weakness-to-persist-on-rally-in-dollar-us-yields/116272957?utm_source=copy&utm_medium={{DEVICE_TYPE}}”},”cat_msid”:25384693,”cat_sub_msid”:false,”msid”:116272957,”entity_type”:”ARTICLE”,”title”:”Rupee weakness to persist on rally in dollar, US yields”,”synopsis”:”Asian currencies declined on Friday, with the offshore Chinese yuan dipping past 7.28 to the dollar. Comments from a top trade adviser to U.S. President-elect Donald Trump warning China against currency manipulation likely weighed on the yuan.”,”titleseo”:”industry/rupee-weakness-to-persist-on-rally-in-dollar-us-yields”,”status”:”ACTIVE”,”authors”:[],”Alttitle”:{“minfo”:””},”artag”:”Reuters”,”artdate”:”2024-12-13 09:06:43″,”lastupd”:”2024-12-13 09:08:55″,”breadcrumbTags”:[“rupee update”,”Indian rupee forecast”,”Reserve Bank of India interventions”,”Reserve Bank of India”,”rupee status”,”rupee now”,”rupee update today”],”secinfo”:{“seolocation”:”industry/rupee-weakness-to-persist-on-rally-in-dollar-us-yields”}}” data-authors=”[” data-author-list data-category-name=”Industry” data-category_id=”23″ data-cat_msid=”25384693″ data-date=”2024-12-13″ data-index=”article_1″ data-keywords=”rupee update, Indian rupee forecast, Reserve Bank of India interventions, Reserve Bank of India, rupee status, rupee now, rupee update today” data-type=”news”>
Asian currencies declined on Friday, with the offshore Chinese yuan dipping past 7.28 to the dollar. Comments from a top trade adviser to U.S. President-elect Donald Trump warning China against currency manipulation likely weighed on the yuan.
- Updated On Dec 13, 2024 at 09:08 AM IST
The RBI’s action in the swap market has distorted the dollar/rupee forward premiums, with near maturities yielding more than far maturities.“>
The Indian rupee will have to contend with the higher run in the U.S. dollar and yields at the open on Friday, which may push the local currency to a new all-time low.
The one-month non-deliverable forward indicated that the rupee will open at 84.87-84.88 to the dollar, compared with 84.8575 in the previous session and near the all-time low of 84.88 hit on Thursday.
The dollar index climbed past the 107 handle in the New York session on Thursday to its highest in more than two weeks. The 10-year U.S. Treasury yield rose about six basis points. Asian currencies declined on Friday, with the offshore Chinese yuan dipping past 7.28 to the dollar. Comments from a top trade adviser to U.S. President-elect Donald Trump warning China against currency manipulation likely weighed on the yuan. A weaker yuan alongside “the sweeping” problems that the rupee is facing, “will likely result in one more busy day” for the Reserve Bank of India (RBI), a currency trader at a bank said.
To support the rupee, India’s central bank has been selling dollars in the spot market and conducting buy/sell swaps. The latter ensures that the intervention in the spot market does not have an impact on rupee liquidity and on forex reserves.
The RBI’s action in the swap market has distorted the dollar/rupee forward premiums, with near maturities yielding more than far maturities.
The run up in the dollar and U.S. yields is despite data further reinforcing high expectations that the Federal Reserve will cut rates next week.
U.S. initial jobless claims increased last week and U.S. producer inflation data indicates that the Fed’s favoured inflation gauge is likely to show a mild reading for November.
- Published On Dec 13, 2024 at 09:06 AM IST
Join the community of 2M+ industry professionals
Subscribe to our newsletter to get latest insights & analysis.
