Rupee dips less than peers on support at 81.80-81.85/USD

By Nimesh Vora

MUMBAI, Nov 28 (Reuters) - The Indian rupee was marginally weaker against the U.S. currency on Monday, but did well relative to other Asian currencies, thanks to a near-term support level, traders said.

The rupee INR=IN was trading at 81.71 per U.S. dollar by 0500 GMT, a tad weaker than 81.6850 in the previous session. The local unit had fallen to 81.8325 earlier in the session.

It's the same as last week when, multiple times, the pair (USD/INR) was unable to move above 81.90, a trader at a private sector bank said.

It is "difficult to pin down exactly" what is leading to the dollar offers above 81.80, the trader said.

The rupee's Asian counterparts were broadly weaker, weighed by concerns over China. The offshore Chinese yuan declined to the dollar and Chinese equities fell on worries about the protests against strict COVID-19 curbs in the world's second-largest economy.

The dollar index =USD rose on weak risk appetite. Treasury yields nudged lower and oil prices fell.

The fall in Brent crude prices to its lowest level since January is likely helping the rupee outperform other Asian currencies, according to traders. Brent crude, already on a three-week losing streak, was down about 2.7% at $81.32.

Rupee forward premiums fell, with the 1-year implied yield below 2% for the first time in over a decade. Cash dollar demand that pushed the overnight cash/swap rate to 0.35 paise is prompting market participants to lower their bid on premiums, said the trader quote above.
Reporting by Nimesh Vora; Editing by Savio D'Souza

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.