India Rupee Likely Higher On Bets Of Foreign Equity Flows

India Rupee Likely Higher On Bets Of Foreign Equity Flows

24 Sep 2019 08:56 AM

The Indian rupee is expected to open higher against the dollar on bets that the cut in corporate taxes would help spur foreign fund inflows into local equities. The rupee is likely to open around 70.76-70.81 per dollar with the previous close of 70.93.

A change in sentiment following the tax cut could help reverse the trend of foreign investors paring their exposure to Indian equities. Worries over India’s economic outlook had prompted foreign investors to take out almost $5 billion in three months prior to the tax cut announcement.

Meanwhile, other Asian currencies were rangebound today while regional equities edged higher. Investor focus remains on next month’s high level trade talks between the U.S. and China after deputy level discussions concluded last week. The U.S. Trade Representative’s office following the talks said the discussions were positive and that Washington looked forward to welcoming the Chinese delegation in October.

The U.S. economy continued to perform better that its major peers. The IHS Markit PMI rose to 51 this month from 50.3 in August, data released yesterday showed. The dollar index edged higher in Asia trading on Tuesday, heading for its third day of advance.