Friday’s opening of the Indian rupee is anticipated to be slightly higher as traders watch for potential signals from Federal Reserve Chair Jerome Powell regarding the scope and timing of interest rate reductions. According to the 1-month non-deliverable forward, the rupee will open at 83.92 to the US dollar, up from the previous session’s close of 83.9525.
A bank currency trader stated that, based on how markets respond to Powell’s remarks, the 84-handle will undoubtedly be in jeopardy on Monday morning.
“I don’t think the RBI will be all that committed to holding 84 on Monday if the dollar continues to rise in response to Powell’s remarks.
In Asia, the rupee has lagged behind and hasn’t benefited from the Fed’s growing confidence in lowering rates at any of its three upcoming meetings this year. Powell is anticipated to reiterate that interest rates are on the rise during his speech at Jackson Hole later in the day. Powell’s previous remarks at Jackson Hole have given indications as to the direction of rates.
Goldman Sachs said in a note that it expects Powell to emphasise downside risks in the labour market and to express “a bit more confidence” in the inflation outlook than he did during his press conference following the July Fed meeting.
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