MUMBAI (Reuters) - The Indian rupee is expected to strengthen against the U.S. dollar at open on Friday as oil prices extended their recent slide to slip to their lowest since February.
The Reserve Bank of India (RBI) policy decision will set the intraday direction for the rupee, traders said.
The rupee will likely open at 79.15-79.20 per dollar, up from 79.47 in the previous session.
Brent crude on Thursday fell 2.8%, taking its losses this month to over 14%. Oil prices have come under pressure amid concerns over demand, pushing Brent crude to its lowest since before Russia's February invasion of Ukraine.
"The ongoing correction in oil prices will be a major relief for the rupee. Specially right now, when worries over the trade deficit are significant," a trader at a private sector bank said.
"Oil will help rupee to open higher and from there it will be down to what the RBI does."
India's central bank is widely expected to increase the key interest rate. Economists polled by Reuters https://www.reuters.com/world/india/rbi-raise-rates-august-no-consensus-size-hike-2022-08-02 expect the hike to be between 25 basis points and 50 basis points.
Traders reckon that a smaller rate hike will put the rupee under pressure considering the recent hawkish rhetoric from U.S. Federal Reserve officials.
Asian currencies were mostly higher on Friday, tracking the dollar index's decline https://www.reuters.com/markets/us/dollar-backfoot-ahead-key-us-jobs-data-2022-08-05 to below 106. The U.S. monthly jobs report due on Friday will be keenly watched to assess how the U.S. labour market is faring and to gauge the outlook on the pace of future Fed rate hikes.
KEY INDICATORS:
* One-month non-deliverable rupee forward at 79.36; onshore one-month forward premium at 20.06 paisa
* USD/INR NSE August futures closed at 79.54 on Thursday; August OTC premium at 14.5 paisa
* Dollar index up at 105.85 after slipping 0.8% in the previous session
* Brent crude futures up 0.4% at $94.5 per barrel after falling 2.8% on Thursday
* Ten-year U.S. note yield at 2.69%, India 10-yr bond yield at 7.16%
* SGX Nifty nearest-month futures up 0.3% at 17,455
* Foreign investors bought net 14.8 billion rupees worth of Indian shares on Aug. 3, according to BSE data
(Reporting by Nimesh Vora; Editing by Shounak Dasgupta)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
You’ve hit your limit of {{free_limit}} free articles this month.
Subscribe now for unlimited access.
Already subscribed? Log in
Subscribe to read the full story →
Quarterly Starter
₹900
3 Months
₹300/Month
Smart Essential
₹2,700
1 Year
₹225/Month
Super Saver
₹3,900
2 Years
₹162/Month
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Access to Exclusive Premium Stories Online
Over 30 behind the paywall stories daily, handpicked by our editors for subscribers


Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share


Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor


Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements


Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app