Indian rupee eases as US data boosts dollar ahead of risk events | Jobs Reply


MUMBAI, Dec 12 (Reuters) – India’s rupee fell on Monday as a stronger dollar weighed on sentiment at the start of a week packed with high-profile events for Asian currencies, including the U.S. Federal Reserve meeting.

The rupee fell to 82.63 per dollar at 10:33 am IST, compared to the previous close of 82.27.

The currency has underperformed its Asian counterparts for a fortnight on dollar outflows and a possible repositioning of equities as traders look to stock market performance.

Indian shares ( .NSEI ) fell 0.2%, along with Asian shares and currencies, as the dollar index was steady around the 105,100 mark.

The Chinese yuan has strengthened by 2.8% over the fortnight, while the rupee has depreciated by 1.2%.

On Friday, US producer price data came in stronger than expected, prompting the Fed to keep interest rates on hold. The focus will now turn to November US retail inflation numbers on Tuesday, followed by the Fed’s policy decision the following day.

Markets could be volatile if “US CPI breaks the bullish outlook and the current prevailing narrative that the Fed will deliver smaller, if perhaps longer, hikes,” HDFC Bank economists wrote.

For the rupee, the week’s slate of deals and stock listings could bring some inflows, but an unpleasant surprise from the Fed could lead to a rush to the dollar, they added.

The US central bank is expected to raise rates by 50 basis points, but the focus will be on the central bank’s updated economic outlook and Chairman Jerome Powell’s press conference.

The Bank of England and European Central Bank policy meetings continue later this week.

In India, CPI data for November is out after market hours on Monday. A Reuters poll showed it was likely to fall to a nine-month low of 6.40%.

Barclays saw the risk of higher rates in India and said any upward surprise in CPI could become a catalyst for that.

Anushka Trivedi reporting from Mumbai; Editing by Janane Venkatraman

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