Rupee slips as rising bias is offset by a fall in Asian peers

• On Thursday, the Reserve Bank of India’s strong defense of the rupee and expectations of portfolio inflows countered a generally favorable bias, leaving the Indian rupee little 

changed.

The rupee

• As of 10:25 a.m. IST, the USDINR was trading at 83.4925 versus the US dollar, up from its previous close of 83.4550.

• The rupee may remain under some pressure throughout the day due to the weakening yuan, but overall the bias is upwards, according to a foreign bank foreign currency trader.

• Due to India’s inclusion in the JPMorgan emerging market debt index later this month, traders anticipate inflows into Indian government bonds to boost currency gains in addition to inflows into local stocks.

• According to preliminary exchange statistics, foreign investors purchased local equities on Wednesday for a net amount of around $948 million.

• When Indian bonds are included to a closely watched JPMorgan index on June 28, foreign inflows into the market are predicted to reach a decade-high of $2 billion.

• Amit Pabari, managing director of FX consultancy company CR Forex, said, “The outlook for the rupee remains stable, even though external factors have capped further gains.”

• Investors will now monitor U.S. statistics on unemployment claims, which might provide hints about the direction the Federal Reserve will take its policy rates in the future.

• According to the CME’s FedWatch tool, interest rate futures are presently pricing in a roughly 64% possibility of a rate decrease in September.