Rupee to focus on US data after index flows underwhelm
By Nimesh Vora
MUMBAI, July 1 (Reuters) -The Indian rupee is expected to open largely unchanged on Monday, mixed Asian peers were mixed, with the focus on important U.S. data due later in the week.
Non-deliverable forwards indicated rupee INR=IN will open barely changed from the previous session's close of 83.3825. Asian currencies were rangebound and lacked direction while the dollar index =USD dipped.
Last week was a choppy one for the rupee, with the inclusion of Indian bonds into the JPMorgan emerging market index and the expiry of the June currency futures. The local currency held a range of 83.36-83.61.
Foreign investors purchased 16.54 billion rupees ($198.4 million) of Indian bonds on a net basis under the Fully Accessible Route on Friday, the day of the inclusion, considerably lower than what bankers had expected.
"Now that the positions related to the inclusion are done, we move back to tracking the dollar and U.S. yields," a currency trader at a bank said.
"Largely, I think we are in a 83.30-83.60 range with risks on the higher side (for dollar/rupee)."
Key U.S. data is due this week, beginning with the U.S. ISM manufacturing numbers later in the day. The ISM Services data will be out on Wednesday and the June non-farm payrolls number will be put out on Friday.
The non-farm payrolls, the most-watched indicator, will provide cues on the health of the U.S. labour market.
Remarks from Federal Reserve Chair Jerome Powell are expected on Tuesday, followed by minutes from the Fed's latest policy meeting.
The U.S. data will hold cues on whether the Fed will cut rates later this year. Hopes of a rate cut in September persisted, following a flat reading on the May U.S. personal consumption expenditures (PCE) price index.
"The data support our view that the disinflation process remains in place," ANZ Bank said in a note.
Fed Fund futures are pricing in a 3-in-4 chance of a September rate cut. FEDWATCH
KEY INDICATORS: ** One-month non-deliverable rupee INRNDFOR= forward at 83.45; onshore one-month forward premium at 6.75 paise ** Dollar index =USD down at 105.62 ** Brent crude futures LCOc1 up 0.4% at $85.4 per barrel ** Ten-year U.S. note yield at 4.39% ** As per NSDL data, foreign investors bought a net $929.2mln worth of Indian shares on Jun. 27
** NSDL data shows foreign investors bought a net $113.3mln worth of Indian bonds on Jun. 27
Reporting by Nimesh Vora; Editing by Janane Venkatraman
Latest News
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.
