Currency News: As of 11:08 a.m. IST, the rupee was slightly weaker than it was in the previous session, trading at 83.27 against the US dollar.
As traders predicted, the Reserve Bank of India’s defense of the rupee will eventually become unsustainable, and the currency is likely to break out of rangebound trade.
Despite ongoing domestic dollar demand and equity outflows, the rupee’s monthly range shrunk last month as the central bank’s interventions in the foreign exchange market kept it from breaking through the record low of 83.29.
The Middle East military conflict and the spike in U.S. Treasury yields may not have a significant negative impact on the rupee.
It is unlikely that October’s events will occur again, according to bankers.
It is unlikely that the rupee’s current narrow range will hold, according to Apurva Swarup, vice president of Shinhan Bank India.
He said, “Eventually the RBI will have to stop,” because the present strategy is not long-term viable.
Expectations of volatility for the rupee have decreased. On Wednesday, one-month implied volatility decreased to 2.45%, a multi-year low. – Currency News
The Middle East military conflict and the spike in U.S. Treasury yields may not have a significant negative impact on the rupee.
Bankers believe that a repeat of October’s events is unlikely.
It is unlikely that the rupee’s current narrow range will hold, according to Apurva Swarup, vice president of Shinhan Bank India.
He said, “Eventually the RBI will have to stop,” because the present strategy is not long-term viable.
Expectations of volatility for the rupee have decreased. On Wednesday, one-month implied volatility decreased to 2.45%, a multi-year low.
It’s a good idea to buckle up and get ready for a possible ride into increased volatility, stated Amit Parbari, managing director of the forex advisory company CR Forex.
Before the announcement of U.S. Wednesday’s Federal Reserve policy later in the day, most Asian stocks fell.
The yield on the 10-year U.S. Treasury increased, and the dollar index increased to 106.75.
There is a strong likelihood that the Fed will leave the policy rate unchanged.
Investors are waiting for clues from Fed Chair Jerome Powell’s press conference regarding the possibility of another rate hike.
