Rupee weakens but still better than Asian peers ahead of US job report, crosses 82 per dollar
2 min read 10 Mar 2023, 03:06 PM ISTAsian currencies dived amidst US stock futures extending their downside on worries about the February job report which is expected to push for more aggressive rate hikes from Fed.
PremiumIndian rupee depreciated against the dollar on Friday ahead of a key US job report which is due later in the day. However, the weakening of the rupee was still better than compared to other Asian peers owing to the selloff in risk assets in the region. Further, the rupee was under pressure amidst sharp selling in domestic equities with Sensex struggling to hold 59,000 and Nifty 50 below 17,400 levels.
At the time of writing, the rupee traded at 82.0375 against the US dollar down by 0.08%. Meanwhile, Asian currencies dived amidst US stock futures extending their downside on worries about the February job report which is expected to push for more aggressive rate hikes from Fed.
On his first day of testimony to lawmakers, Fed's chair Jerome Powell stated that policymakers are ready to increase key rates higher than previously expected on the backdrop of stronger than expected latest economic data. He said that faster tightening of monetary policy is warranted and that they are prepared to also increase the pace of rate hikes.
Meanwhile, US jobless claims climbed to the highest level since December last year by 21,000 in the week that ended March 4, 2023, to come at 211,000.
On Thursday, the rupee gained slightly against the US dollar which was most likely due to RBI's intervention in the forward and spot market. The local unit closed at 81.9750 per dollar compared to its previous day's print of 82.055.
Earlier, today, Sriram Iyer, Senior Research Analyst at Reliance Securities said, "Most of the Asian peers have started weaker this Friday morning and will weigh on sentiments."
Iyer added, "Investors will also await IIP and manufacturing activity numbers after markets, along with RBI FX reserves data." He also said, in the overseas markets, the U.S. Dollar was marginally weaker this Friday morning in Asian trade ahead of non-farm payrolls.
Further, Iyer highlighted that the Euro and the Sterling started flat this early Friday morning as investors awaited fresh triggers. While the Yen was trading marginally weaker this early Friday morning as the last policy from the outgoing BoJ Governor Haruhiko Kuroda could remain ultra-dovish.
So far on Friday, Sensex and Nifty 50 dropped by a little over 1.5% each. The 30-scrip benchmark is trading at 59,130.03 down by 676.25 points or 1.13%. While Nifty 50 performed at 17,416.75 lower by 172.85 points or 0.98%.
Supports for the USDINR spot pair are at 81.8300 and 81.6800, resistances are at 82.1500 and 82.3100," Iyer added.
Meanwhile, Anand James - Chief Market Strategist at Geojit Financial Services said, "Having stretched to the vicinity of the lower band of the 81.75-82.27 region, a pullback towards the upper band is expected today, consistent with our sideways view. But, a close above 82.04 could fuel upsides aiming 82.4 or even 83 again. "
