Rupee Expected to Fall on Robust US Job Market
The Indian rupee is expected to weaken on Friday as the U.S. dollar and U.S. yields rose due to a drop in Americans filing new claims for unemployment benefits. Non-deliverable forwards indicate the rupee may open at around 82.06-82.08 against the U.S. dollar, compared to 81.9850 in the previous session.
The dollar’s strength is causing some downward pressure on the rupee.The U.S. labor market data showed positive signs, which led to speculation that the Federal Reserve might consider a rate hike beyond its July meeting. The dollar index and U.S. yields increased as a result. The Fed is anticipated to announce a 25 basis points rate hike next week. Investors were expecting a pause after that, but if the U.S. labor market data continues to perform well, another rate hike in September or November may occur.
Overall, the rupee has been trading in a narrow range this week. The market is keeping a close eye on economic data that could influence the rate hike cycle.
