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Updated January 5th, 2024 at 15:51 IST

Rupee closes stronger on Dollar inflows, sees steady week amid Asian slump

The Rupee closed at 83.15 against the US Dollar, higher by 0.1 per cent compared with its close at 83.23 in the previous session.

Business Desk
Rupee closes slightly higher, supported by dollar inflows
Rupee versus Dollar | Image:Republic
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Rupee versus Dollar: The Rupee closed stronger on Friday, supported by Dollar inflows even as its Asian peers slipped heading into the release of key US labour market data due later in the day.

The Rupee closed at 83.15 against the US Dollar, higher by 0.1 per cent compared with its close at 83.23 in the previous session. The local unit was little changed week-on-week.

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The Rupee has made a sturdier start to 2024 compared to its Asian peers, most of which fell on Friday and were down week-on-week, as the Dollar gained amid a paring of early rate cut expectations in the United States.

Investors are now pricing in a 34 per cent chance of the Fed keeping rates unchanged at its March meeting, up from 11.5 per cent on December 29, according to CME Group's FedWatch tool.

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"Price action over the last two days has indicated good flows," an FX trader at a foreign bank said, adding that Dollar sales from both state-run and foreign banks helped the Rupee on Friday.

The Rupee strengthened even as the Dollar index rose to its highest level since mid-December and appeared on track to post its strongest weekly gain since May 2023.

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But the Rupee's gains are unlikely to sustain and the local unit may retrace to the 83.25-83.35 range next week, Gaurang Somaiya, a foreign exchange research analyst at Motilal Oswal Financial Services said.

Broadly, analysts expect the Rupee to continue hovering in its tight range with only a modest strengthening to the 83-handle likely by end-March, according to a Reuters poll of 42 analysts.

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Investors now await the closely watched US non-farm payrolls and unemployment data set to be released post Indian market hours on Friday.

The US economy is expected to have added 170,000 jobs in December with the unemployment rate pegged at 3.8 per cent, according to a Reuters poll.

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(With Reuters inputs.)

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Published January 5th, 2024 at 15:51 IST

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