MUMBAI: The Indian rupee is expected to open little changed on Wednesday as the dollar struggled in the lead up to Federal Reserve Chair Jerome Powell’s comments and on likely hedging interest from importers.
The 1-month non-deliverable forward indicated that the rupee will open unchanged from 83.7925 in the previous session.
The rupee had its best day in nearly two months on Tuesday, thanks to the across-the-board decline in the dollar.
The dollar index is near its lowest level this year.
“The last round of the dollar’s fall has been without an apparent trigger, which is never a good sign (for the US currency),” a currency trader at a bank said.
Indian rupee worst Asia performer
“When you add to that the resolute defence of the 84-level, longs (on dollar/rupee) do not make sense and I suspect a positions have been down (which are helping the rupee).”
Still, it is not expected that the rupee will be able to manage much of a rally from here.
Overall, the direction of the rupee remains on the weaker side and importers are likely to use any relief rallies to hedge, a fx salesperson at a private sector bank said.
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