Rupee impasse around 82 drags on, forward premiums flat

Rupee impasse around 82 drags on, forward premiums flat

The Indian rupee declined marginally on Friday tracking the move higher on the dollar index, while forward premiums were barely changed. The rupee was at 82.0275 to the U.S. dollar by 10:52 a.m. IST compared with 81.9850 on Thursday. The local currency has been in a 3-paisa range so far.

“Another day, another standoff around 82. Hopefully, next week will bring in a tradeable move,” a forex dealer at a bank said. The Federal Reserve‘s policy decision is due next Wednesday, followed by that of the European Central Bank (ECB) on Thursday and the Bank of Japan (BOJ) on Friday.

Asian currencies struggled after the dollar index and U.S. yields rose on data that indicated the U.S. labour market remained resilient. Initial claims for unemployment benefits dropped to the lowest since mid-May. The dollar index inched up to 101.78 in Asia and the 2-year U.S. yield climbed above 4.80%.

While the dollar index is “showing renewed strength, until the resistance of 101.80 is convincingly taken out, the pressure could remain on the downside, Amit Pabari, managing director at CR Forex, said. Rupee premiums, like spot, were in a narrow range. The 1-year implied yield was little changed at just below 1.70%.