The Indian rupee is expected to open higher against the dollar

The Indian rupee is expected to open higher against the dollar

15 Nov 2019 08:49 AM
 
The Indian rupee is expected to open higher against the dollar after a White House economic advisor indicated that a U.S.-China trade deal was close, boosting Asian currencies.  The rupee likely to open around 71.86-71.96 compared with its previous close of 71.97.
Yesterday, the rupee did quite well to close above 72 after falling below 72.20 earlier, and it looks like that rebound may extend further. However, the trend on the rupee remains firmly lower in light of a likely further decline in local interest rates, the RBI’s apparent discomfort at the rupee’s strength, and the worsening economic outlook.
The Chinese yuan was up 0.2% to the dollar at 7.0060 on Friday and other Asian currencies were trading higher after U.S. President Donald Trump’s top economic advisor said trade discussions with Beijing were constructive. Larry Kudlow said the two countries were in close touch and indicated a deal could be reached soon.
An interim trade deal will be a major relief for Asian currencies and could temporality lift the rupee,the dealer said. “However, I don’t expect interbank to be in a hurry to sell the dollar unless and until a deal is actually reached.
While Kudlow’s comments boosted optimism about the trade deal, recent reports have suggested otherwise. A day after the Wall Street Journal reported that talks had hit a hurdle on account of farm purchases, the Financial Times said an agreement may not be reached in time to avoid a new round of U.S. tariffs that takes effect in the middle of next month.
The South Korean won led other Asian currencies higher, advancing 0.4%. The safe-haven yen declined and the U.S. yields edged higher. U.S. equity index futures advanced and Japanese stocks paced gains in Asian equities. Hong Kong’s benchmark index, closely watched by traders amid rising unrest in the city, edged higher.
The dollar index was little changed after falling yesterday. U.S. data on Thursday showed that U.S. producer prices increased by the most in six months last month. Wholesale prices for final demand rose 0.4% month-on-month after falling 0.3% in September.

 

Recommended for you...