Market News

Rupee climbs to over one-month high on foreign banks' dollar sales - REUTERS

MAY 22, 2024

MUMBAI, May 22 (Reuters) - The Indian rupee rose to its highest in over a month on Tuesday, aided by dollar sales from large foreign banks and a dip in Treasury yields ahead of the release of minutes from the Federal Reserve’s latest policy meeting later in the day.

The rupee was at 83.23 against the U.S. dollar as of 10:00 a.m. IST, up 0.09% from its close at 83.3050 in the previous session.
The rupee rose to an intra-day peak of 83.2250, its highest since April 10, in early trading.

Dollar sales from at least two large foreign banks, most likely on behalf of custodial clients, helped lift the rupee, a foreign exchange trader at a private bank said.
"Some long cutting (on USD/INR) has also been seen," which is contributing to the price action, the trader added.

The dollar index was steady at 104.6 while most Asian currencies were rangebound. U.S. bond yields slipped with the 10-year Treasury yield down 2 basis points at 4.41%.
"In the short term, one can expect the rupee to approach levels of 83.00 to 83.10," Amit Pabari, managing director of FX advisory firm CR Forex said.

Meanwhile, in the absence of key economic data in the U.S. this week has put the attention on remarks from Fed policymakers.

In recent remarks, officials have urged patience on when the rate cut cycle may kick off.
"We're in a period when patience really matters," Boston Fed President Susan Collins said on Tuesday. "I think the data has been very mixed ... and it's going to take longer than I had previously thought."

Investors are currently pricing in a near 65% chance of the Fed cutting rates in September, according to CME's FedWatch tool.


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