A gas station attendant handles Indian rupee banknotes in Kolkata, India, on August 16, 2018.Reuters/Rupak De Chowdhuri/File Photo Acquisition of license rights
MUMBAI, Aug 31 (Reuters) – The Indian rupee is expected to start higher on Thursday as the dollar index widened its losses following a downward revision to U.S. economic growth in the second quarter. .
Non-Deliverable Forwards said the rupee was suggesting a start near $82.62-82.64 to the previous trade close of $82.7325.
The currency has failed to sustain its early rally in any of the last three sessions. It fell to 82.80 on Wednesday.
A forex trader at a Mumbai-based bank said it would be “not surprising” for the rupee to rise after the opening, given recent price action and the subdued performance of Asian currencies.
Asian currencies rose between 0.1 and 0.2 percent on Wednesday after the dollar index fell to a two-week low for a third day in a row.
The dollar index fell to near 103 and U.S. Treasurys tumbled after disappointing growth and labor market data dampened hopes of another rate hike by the Federal Reserve.
U.S. gross domestic product (GDP) rose at an annualized pace of 2.1% last quarter, below the preliminary 2.4% growth. Meanwhile, U.S. private employment added 177,000 last month, a lower than expected.
“U.S. macro data continued the mild theme that started a few days ago,” ING Bank said in a note.
Two-year US Treasury yields edged lower on Wednesday while US stocks rose.
India’s GDP figures are due to be released on the same day. India’s economic growth is likely to accelerate to 7.7%, the fastest pace for the year, on strong growth in the services sector, according to a Reuters poll.
“The GDP data will not have a big impact on the rupee,” said the forex trader.
Key indicators:
** 1-month non-deliverable rupee forward is Rs.82.74.Onshore 1-month futures premium is 9 paisa
** USD/INR NSE September futures settled at 82.8050 on Tuesday.
** USD/INR September futures premium is 8 paisa
** Dollar index is 103.10
** Brent crude futures fell 0.1% to $85.8 a barrel
** US 10-Year Treasury Yield is 4.11%
** Foreign investors net bought $95.9 million worth of Indian stocks on August 29, according to NSDL data.
** Foreign investors net bought $167 million worth of Indian government bonds on Aug 29, according to NSDL data
Reported by Nimesh Vora.Editing: Savio D’Souza
Our criteria: Thomson Reuters Trust Principles.
