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Updated January 2nd, 2024 at 12:01 IST

Rupee slides on weakness in Asian peers during data-heavy week

As of 10:10 am, the Rupee stood at 83.33 against the US dollar, marking a 0.1 per cent decline from its previous close at 83.2075.

Reported by: Business Desk
Rupee
Rs 200 notes | Image:Shutterstock
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The Rupee faced depreciation on Tuesday, influenced by the weakening trend seen in other Asian currencies. This dip in regional currencies coincided with a subdued risk appetite, with market focus shifting towards crucial US economic data scheduled for release throughout the week.

As of 10:10 am, the Rupee stood at 83.33 against the US dollar, marking a 0.1 per cent decline from its previous close at 83.2075. 

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Notably, the Korean won and Thai baht experienced the most significant losses among Asian currencies, falling 1 per cent and 0.3 per cent, respectively, while the dollar index climbed to 101.56.

The Rupee's descent is primarily attributed to global factors, according to a foreign exchange trader at a state-run bank. However, the trader suggested that losses are likely to be contained as attractive selling offers for dollars are available at these levels.

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The ongoing week is laden with significant economic data releases in the United States, including the ISM manufacturing PMI on Wednesday, initial jobless claims on Thursday, and unemployment data on Friday. 

Investors are also keenly awaiting the release of the minutes from the US Federal Reserve's December policy meeting on Thursday, seeking insights into policymakers' perspectives on the trajectory of interest rates.

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Mounting expectations of rate cuts have exerted pressure on the dollar, which had touched its lowest point in five months the previous week. 

The dollar-Rupee pair is anticipated to "remain in the range with 83.40 being a near term top" as the Reserve Bank of India (RBI) continues to maintain a robust presence in the market, as noted by Anil Bhansali, the head of treasury at Finrex Treasury Advisors.

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While the inflows into India might be subdued at the beginning of the new year, traders anticipate an uptick from the second week, which is expected to support the Rupee. 

In 2023, overseas investors had a net buy of $28.7 billion in Indian equities and bonds, with $10.1 billion recorded in December alone.

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(With Reuters Inputs)

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Published January 2nd, 2024 at 10:25 IST

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