Rupee likely to struggle at open on weak Asia peers

the Indian rupees It is expected to struggle at the open against the US dollar on Friday, tracking losses in other Asian currencies amid cooling risk appetite.

The non-deliverable futures contract indicates that the rupee will open at around 82.10-82.12 per US dollar compared to 82.09 in the previous session. With the greenback doing well despite the weak US data, USDINR is likely to be “slightly bid” at the open, said one spot trader.

He added that respecting the recent rally (on USD/INR) at 82.15 and the “decent” resistance at 82.25-82.30 would keep the upside in check at least in the initial part.

Asian currencies fell between 0.3 percent and 0.6 percent, affected by the dollar’s recovery against major currencies. The offshore Chinese yuan fell to 6.96 per dollar.

On Thursday, the dollar index posted its best session in nearly two months despite data supporting current expectations that the US Federal Reserve has finished raising interest rates. The number of Americans filing new applications for unemployment benefits jumped to a 1-1/2-year high last week, pointing to cracks in the labor market.

Moreover, the producer price index in the United States rose 2.3 percent in April, the smallest year-on-year rise since January 2021 and after an advance of 2.7 percent in March.

Dollar strength, despite the data, was brushed off by analysts on safe-haven demand amid renewed concerns about regional US banks.

Shares of the US regional lender, Backwest Bancorp, tumbled after it reported its deposits fell 9.5 percent last week and that it had provided more guarantees to the Federal Reserve to boost liquidity.

ANZ said in a morning note that renewed concerns about the condition of some US regional banks is driving demand for lower-risk investments.

The S&P 500 and Dow Jones Industrial Average fell overnight.