MUMBAI: The Indian rupee is expected to struggle at open versus the US dollar on Friday tracking losses in other Asian currencies amid tepid risk appetite.
Non-deliverable forwards indicate the rupee will open at around 82.10-82.12 to the US dollar compared with 82.09 in the previous session.
With the dollar doing well despite the weak US data, USD/INR will likely be “slightly bid” at open, a spot trader said.
The respect for the recent high (on USD/INR) of 82.15 and “decent” resistance at 82.25-82.30 will, however, keep the upside in check at least in the initial part, he added.
Traders assess sustainability of Indian rupee’s decline, eye U.S. inflation data
Asian currencies were down between 0.3% and 0.6%, weighed by the dollar recovery against major peers.
The offshore Chinese yuan dropped to 6.96 to the dollar.
The dollar index on Thursday had the best session in nearly two months despite data supporting current expectations that the US Federal Reserve is done with rate hikes.
The number of Americans filing new claims for unemployment benefits jumped to a 1-1/2-year high last week, pointing to cracks in the labour market.
Further, the US producer price index rose 2.3% in April, the smallest year-on-year rise since January 2021 and following a 2.7% advance in March.
The dollar’s strength, despite the data, was put down by analysts to safe-haven demand amid renewed worries over US regional banks.
Shares of a US regional lender, PacWest Bancorp, plunged after it reported its deposits fell 9.5% last week and that it had posted more collateral to the Fed to boost its liquidity.
Renewed concerns regarding the state of some US regional banks is pushing up demand for less risky investments, ANZ said in a morning note.
The S&P 500 Index and the Dow Jones Industrial Average dropped overnight.
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