Mumbai: In a peculiar movement, the Indian currency is to defy the trend dominating across most Asian currencies except for the single currency.
There are clues of a market embracing a momentum that embraces the rupee. Closing the previous session at 85.26 to the US dollar, the rupee is expected to open a shade higher or flat, holding off against a day-and-after intraday reversal.
Thursday saw the rupee go smack in the teeth, plummeting to an intraday high of 85.66 and barely recouping any of it to settle at a nice price around 85.25.
The pressure path put forward by the importer on immediate payment counts and was giving portions of books for dollar buys, whereas the up-move came following the Dollar selling meant that capital flows are still in place, and the market is in a risky mood.
The rupee has drawn support from inflows from foreign investors into Indian equities due to an improvement in the global risk sentiment. Recent statements by Donald Trump that were largely perceived as lowering risk have brought a sense of reprieve.
Trump reassured the market by telling them about his regard for the Federal Reserve's independence, while calling the U.S.-China trade tension to reduce, which has helped to lift risk appetite and boost foreign investment.
In contrast, most other Asian currencies are hurting, as the U.S. dollar continues to gyrate on trade and Federal Reserve headlines. Despite the regional weaknesses, the Indian rupee is quite helped by strong internal factors and the global risk-on environment.
But analysts firmly believe that the direction of the U.S. dollar will essentially underpin how the rupee may perform; particularly with things still worsening between the U.S. and China on trade.
[Source Credit: Business Recorder]
