Rupee likely to trade in a range, bond yields may rise further, say analysts
Also Read: Morgan Stanley downgrades outlook on US dollar to neutral amid falling Treasury yields after Fed’s dovish pivot Investors are looking for the US non-farm payrolls data due Friday to gauge how many times the US Fed is likely to cut rates this year. “The rupee has appreciated this week despite gains in the US dollar index overseas. The foreign capital inflows and RBI intervention have been supporting the local currency for quite long and hence, USDINR has been trading in a range." said Ajay Kedia, Director, Kedia Commodities.
Kedia believes the outlook for rupee remains positive in the near term amid strong domestic macroeconomic cues. “Rupee will get support at 82.80 and may face resistance at 83.44. The USDINR is likely to trade in this range going forward," Kedia said.
(Exciting news! Mint is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest financial insights! Click here!) Meanwhile, the upward projection in Indian government bond yields continued in the first week of 2024, mainly tracking the rise in the US 10-year Treasury yields after strong economic data reduced the likelihood of aggressive rate cuts by the US Federal Reserve. India’s 10-year benchmark bond yield was around 7.23%. “The upbeat US economic data has been reducing the probability of the Fed starting the rate cut cycle from March 2024, but more clarity will come after tonight’s US non-farm payrolls data.
Any figure above 1,00,000 may indicate a resilient jobs market. A sharp rise above the market expectations would take the US 10-year even higher, putting further upward pressure on Indian bond yields," said an economist with a private bank. Also Read: UPI versus e-rupee? For next week, she expects
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