Daijiworld Media Network - Mumbai
Mumbai, Jan 8: The Indian rupee is set to open weaker on Wednesday after robust US economic data boosted the dollar and pushed US bond yields higher. The one-month non-deliverable forward suggests the rupee will open at 85.80-85.81 against the dollar, compared to its previous close of 85.7125.
The dollar index slipped slightly to 108.58 in early Asia trade but remains firm after US job openings surged to 8.098 million, surpassing forecasts of 7.7 million, and services sector activity accelerated. This also drove the 10-year US treasury yield to 4.69%, its highest level since April 2024.
Pressures on the Rupee
Concerns over India’s slowing economic growth and subdued capital inflows have added to the rupee’s challenges. Foreign investors have net sold $2 billion worth of Indian stocks and bonds in January, while the government has pegged GDP growth for the current fiscal year at 6.4%, the slowest in four years.
DBS Bank noted in a report that the rupee is likely to weaken further this quarter, given unfavorable global and domestic factors. The Reserve Bank of India’s apparent tolerance for a weaker currency under its new governor has also been a focus for traders.
Broader Asian Trends
Other Asian currencies were mostly weaker, with the offshore Chinese yuan trading at 7.34. Brent crude prices rose 0.3% to $77.3 per barrel, and the 10-year US bond yield remained elevated at 4.68%.
Key Indicators
• Rupee forward: One-month non-deliverable at 86.05; onshore forward premium at 24.5 paise
• Dollar index: Down 0.1% at 108.58
• Brent crude: Up 0.3% at $77.3 per barrel
• Foreign investment: Net $356 million sold in Indian shares and $56.6 million in bonds on Jan. 6 (NSDL data)
The rupee’s performance in the coming weeks will depend heavily on global market cues and domestic economic policies.