Market News

Rupee underpinned by expected inflows, countered by weak Asian peers - REUTERS

JUNE 24, 2024


MUMBAI, June 24 (Reuters) - The Indian rupee was largely unchanged on Monday with expectations of dollar inflows related to domestic bonds being included in a JPMorgan index being countered by weakness in the Chinese yuan and Japanese yen. 

The rupee was at 83.5350 to the U.S. dollar at 11:12 a.m. IST, having risen to 83.4625 immediately after open. It closed at 83.5325 on Friday. "You will see this kind of choppy move all through the week. The bias (on dollar/rupee) is slightly lower," a currency trader at a bank said, noting that inflows will be taking place against the backdrop of a broadly higher dollar. Advertisement · Scroll to continueReport this ad India's inclusion in the widely tracked JPMorgan emerging market debt index is expected to spur passive inflows of about $2 billion around June 28. However, the impact of inflows into the rupee will be muted by a drop in major Asian currencies like the yuan and the yen. 

The yen is back to the near 160 handle versus the dollar, a level that previously prompted authorities to intervene. Japan is always ready to take action against excessive market moves, Tokyo's top currency diplomat said on Monday. Advertisement · Scroll to continueReport this ad The offshore yuan declined to 7.2950 to the U.S. dollar, the lowest since November. 

Expectations that the Federal Reserve will not be cutting rates in a hurry and data that indicated robust U.S. business activity boosted the dollar against the major Asian currencies. The U.S. business activity inched up to a 26-month high in June. This is "adding to the narrative of a still largely resilient US economy", MUFG Bank said in a note.


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