Rupee to open flat in lack of substantial movement in Asian peers

Rupee to open flat: The rupee is expected to open mostly unchanged on Monday, despite a decrease in US Treasury yields and the dollar following the release of the monthly US jobs report, which increased the likelihood of potential interest rate cuts by the Federal Reserve later in the year.

Non-deliverable forwards suggest that the rupee will open flat from its previous session level of 83.4150.

According to an FX trader at a bank, there has not been any major movement in Asia, and substantial momentum is required for the rupee to shift significantly. However, there may be a reduction in the constant buying pressure on USD/INR seen in recent sessions, potentially leading to the range of 83.50-83.55 being disregarded.

The 10-year US Treasury yield fell to a three-week low on Friday as the US economy added fewer jobs than expected, with the unemployment rate increasing and wages growing less than forecasted.

Investors are now anticipating nearly two rate cuts by the Fed this year, aligning with Fed Chair Jerome Powell's suggestion that a rate hike is improbable.

Although one weaker report does not establish a trend, it supports the Fed's assertion that the current policy stance is restrictive, noted ANZ Bank in a commentary.

Furthermore, a survey revealed an unexpected contraction in the US services sector last month, prompting investors to opt for Treasuries and steer clear of the dollar.

Despite the dollar index dropping to its lowest level in nearly a month and US equities rallying, most Asia currencies, including the Japanese yen and the offshore Chinese yuan, experienced declines at the start of the week.

This week is relatively light in terms of US data releases, with attention focused on several scheduled speeches by Fed officials.

(With Reuters inputs)