Rupee weakens on importer dollar demand ahead of US CPI
rupee declined on Thursday as importers bought the U.S. dollar ahead of the release of consumer price index (CPI) data from the world's largest economy later in the day.
The rupee settled at 83.2425 against the dollar compared with 83.1875 in the previous session, after having risen to a session high of 83.13.
Most Asian currencies rose with the Thai baht leading the gains.
The dollar index was little changed at 105.7, hovering near a two-week low, after minutes of the U.S.
Federal Reserve's latest meeting showed policymakers taking a cautious stance.
«We think today's CPI print is a bigger test for USD short-term bears,» ING Bank said in a note. «We warn against attaching hopes of a sustainable dollar decline to declining U.S.
yields.»
U.S. core CPI is expected to hold steady at 0.3% month-on-month, according to a Reuters poll.
The U.S.
10-year Treasury yield eased.
The rupee may test its record low if U.S. CPI is higher than expected, a trader at a private bank said.
The unit fell to an all-time low of 83.29 in October 2022.
«The pressure on the rupee will remain,» said Arnob Biswas, head of foreign exchange research at SMC Global Securities, hinting the dip in the dollar could be short lived.
India will also report inflation data later on Thursday, with headline retail inflation expected to moderate to 5.5% on year in September from 6.83% in August.
«Given the upside risk to oil prices, we do not a see a move below 83 levels (on USD/INR),» HDFC Bank's treasury research desk said in a note.
