Rupee anticipates boost from decline in US yields, strength in Asian peers

The Rupee is poised to gain support from a decrease in US Treasury yields and the strengthening of Asian currencies on Tuesday, while keeping an eye on major events later in the week.

Non-deliverable forwards suggest that the Rupee, which closed at 83.1325 against the US dollar in the previous session, will open flat to slightly higher. 

The Rupee's intraday range on Monday was minimal, indicative of subdued market activity following a narrow range in the past few days.

Asian currencies have seen gains of 0.1 per cent to 0.4 per cent, while the 10-year US Treasury yield continued its decline from Monday's levels. 

The US Treasury Department's announcement of reduced borrowing needs has bolstered demand for US Treasuries ahead of the Quarterly Refunding Announcement and the Federal Reserve policy review scheduled for Wednesday.

Although the Fed is expected to maintain the policy rate within the 5.25-5.50 per cent range, investors await cues regarding the potential start of a rate cut cycle. 

Market attention will focus on the Fed's 2024 policy framework and any indications about the timing of prospective rate cuts.

ANZ analysts anticipate the Fed to exercise caution and possibly delay initiating an easing cycle until mid-year.

In the oil markets, prices experienced a slight uptick in Asia following a volatile session on Monday. 

Brent crude reached its highest level since November amidst escalating tensions in the Middle East, although it struggled to sustain the upward momentum.

(With Reuters Inputs)