MUMBAI: The Indian rupee is likely to open little changed on Friday and be driven by local demand for U.S. dollars during the session, after global markets were largely muted due to the Thanksgiving holiday in the United States.
Non-deliverable forwards indicate rupee will open at around 82.32-83.33 to the U.S. dollar, barely changed from 83.3425 in the previous session.
“Expecting another session with tight range,” a foreign exchange trader at a state-run bank said. “Some higher demand can be seen on account of Thursday’s US holiday and Monday’s INR holiday.”
Indian markets will be closed on Monday on account of a local holiday.
Asian currencies were largely subdued and the dollar index was little changed at 103.78. The dollar index appears to be on a course for a quiet week after having fallen almost 2% last week.
U.S. Treasury yields rose in Asia with the 10-year yield inching up to 4.45% and the 2-year ticking higher to 4.93%.
The rupee is likely to stay flat on Friday “lacking any significant triggers,” said Arnob Biswas, head of foreign exchange research at SMC Global Securities.
But there is a potential for a relief rally in the rupee next week, driven by dollar sales from exporters, Biswas added.
Equity inflows worth about $1.5 billion related to the rebalancing of MSCI index effective from Nov 30 could provide more support the rupee in the coming week.