The rupee was subdued early Monday, even as the dollar hovered about 1 percent below a two-decade high against major rivals, as investors watched a slew of central bank meetings this week, with the Federal Reserve taking the lead.
Bloomberg showed the last rupee at 79.7200 per dollar after opening at 79.6700, compared to Friday’s closing price of 79.7450.
PTI reported that the domestic currency rose 8 paise to 79.70 against the US dollar in early trading.
Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors, said the rupee opened slightly firmer as Asian stocks opened flat or higher, the dollar index opened at 109.80, US Treasury yields at 3.45 percent and Asian currencies opened slightly stronger than they did on Friday.
“The range for the day is expected to be 79.50 to 80 with close monitoring of RBI as they try to maintain the 80 level,” Mr Bhansali told PTI.
The dollar index, which compares the dollar’s value to six other major currencies, rose 0.09 percent to 109.66 on Friday. It has been volatile in recent weeks, reaching a high of 110.79 on September 7 for the first time since mid-2002, before falling to 107.67 six days later.
Investors have been guided by economic data that has on occasion suggested the Federal Reserve could slow the pace of rate hikes to mitigate the blow to the economy and the risk of a recession, but subsequent data shows inflation is still escalating .
Markets currently expect at least a 75 basis point increase ahead of this week’s Federal Open Market Committee meeting, with a 19 percent chance of a super-big one full percentage point increase.
“The USD could remain high as the FOMC continues to rise aggressively and global recession risks mount,” and could reach another cyclical peak above 110.8, Commonwealth Bank of Australia Strategists wrote in a client note, according to Reuters.