MUMBAI: The Indian rupee was poised to inch higher against the US currency on Friday, helped by a subdued dollar index and an uptick in most Asian currencies.
The rupee is expected at around 81.25-81.30 to the dollar at open, compared with 81.36 in the previous session.
The local currency has repeatedly struggled to move above the key 81.20-81.25 level this week.
“The path of least resistance is on the downside (for USD/INR),” a trader at a Mumbai-based bank said, but the rupee bulls would have more confidence if the 81.20 level is taken out.
The dollar index was hovering near the 102 level while the rupee’s Asian peers were higher or little changed.
Asian shares were mostly higher despite overnight losses on Wall Street.
US equities have fallen for three straight sessions on concerns over an economic downturn. Data out on Thursday continued to show that the world’s largest economy was slowing down after multiple hefty interest rate hikes from the Federal Reserve.
Indian rupee seen lower as growth fears hit risk sentiment
US housing starts declined 1.4% to a rate of 1.382 million units last month.
Building permits dropped, down 1.6% to a rate of 1.330 million units.
The safe-haven dollar is caught between weak US data, which is prompting a fall in Treasury yields, and risk aversion.
The dollar index at 102 is not too far from its recent lows.
A few analysts reckon that the dollar is poised for a recovery.
We expect risk appetite to worsen further over coming months, supporting both the dollar and the Japanese yen, Capital Economics said in a note.
Fed futures show that the market is pricing in rate cuts by the US central bank later this year, a reflection that investors expect the focus to turn to supporting growth.
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