Indian Rupee Closes Flat As Exporter Dollar Sales Mask Weak Risk Sentiment

Indian Rupee Closes Flat As Exporter Dollar Sales Mask Weak Risk Sentiment

11 May 2021 03:49 PM
 

The Indian rupee ended flat against the dollar as exporters’ dollar sales masked the impact of a weak risk mood in the region.

The rupee was trading at 73.34 compared with 73.35 in the previous session.

The rupee, in early trades, came under pressure tracking a decline in most Asian shares and currencies after U.S. equities saw their worst session in seven weeks amid a further pickup in inflation expectations.

A jump in commodity prices, multi-year highs on the Bloomberg and Reuters commodity indexes, and expectations that economic activity is likely to pick up substantially amid a record fiscal stimulus have led investors to expect a spike in inflation.

For emerging market asset classes, the key question is how long can the Fed continue calling inflation transitory and not allow it to hamper its ultra-loose monetary policy.

The one-year forward premium was at 3.83 rupees versus 3.75 rupees at previous close.