On Wednesday, the Indian rupee started the day somewhat stronger versus the US dollar and the UAE dirham.
Prior to the important US inflation data that will provide clues about the Federal Reserve’s interest rate path this year, US Treasury yields saw a slight increase.
At nine in the morning, UAE time, the South Asian currency was trading at 83.4775 to the US dollar (or 22.75 against the UAE dirham), down from 83.52 (22.76) the previous session.
The Indian rupee has been trading close to the 83.50 handle in recent days.
Some traders believe that in order to keep the rupee from falling to an all-time low of 83.5750, the Reserve Bank of India has been lining up dollar offers on the interbank order matching system.
“I can see why it would be challenging to move the USD/INR higher than 83.50 due to the RBI. But how come the dips are essentially nonexistent as well?” asked a bank’s forex trader.
Prior to the release of the US consumer inflation data, the dollar index dropped below 105 and the yield on the 10-year US Treasury fell to 4.44 percent. According to Reuters polled economists, the core consumer price index will increase by 0.3% in April on a monthly basis.
Tuesday saw gains in US stocks, and S&P 500 Index futures were higher in Asia.
Data revealed that US producer prices increased more than anticipated in April, ahead of the consumer inflation report. The March data, however, was altered to reflect a 0.2% increase instead of a 0.1% decrease.
Fed Chair Jerome Powell described the April producer price report as more “mixed” than “hot,” taking into account that April’s data was higher than anticipated while earlier data was revised lower.
Also Read:
Pay and Flexibility: Reasons UAE Public Sector Workers are Switching to Private Companies
Over 60 Injured and at Least 4 Dead After a Billboard Collapse in Mumbai
