Rupee inches up; shrugs off weak Asian FX, higher US yields

The Indian rupee was marginally higher on Monday, managing to avoid the losses on other Asian currencies in the wake of a move up in U.S. yields.

The rupee was at 82.4325 to the U.S. dollar by 10.40 a.m. IST, slightly up from 82.4625 on Friday.

The offshore Chinese yuan was down to 7.1550 to the dollar, hovering near the year-to-date low. The Indonesian rupiah and the Thai baht dropped 0.3%, while the dollar index inched up.

The USD/INR is holding below 82.50, but “that is just the way the rupee is”, a senior fx trader at a private bank said, referring to the low volatility on the pair.

“Not reading too much into this and waiting for the U.S. inflation data (due on Tuesday),” he said.

The data comes a day before the Federal Reserve’s interest rate decision. Economists polled expect core consumer prices to rise 0.4% month-on-month.

The release of the inflation data just before the Fed move “is adding some uncertainty to the immediate call (on what the U.S. central bank will do)”, ANZ said in a daily note.

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