The Indian rupee is showing an upward trend equivalent to today’s greenback, which is mostly sponsored by an increase in risk appetite, which has positively impacted Asian currencies. At 10:15 AM IST, the rupee stood at 83.27 against the US Dollar, registering a new high since April 10 that breached the previous day’s closing of the day at 83.3425. The greenback index slipped on Tuesday, touching 105.6, while the won of Korea and the rupiah of Indonesia edged higher by 0.4 per cent each, helping to register the highest increase among regional peers.
Tuesday’s US PMI data revealed a slowdown in business activity to a four-month low in April, attributed to weakened demand, resulting in a nearly 0.4 percent decline in the dollar. Meanwhile, dollar-rupee forward premiums saw an increase, with the 1-year implied yield rising by 2 basis points to 1.68 percent.
Traders will be ready on Thursday to wake up early as it is the US GDP data’s release day for which they are waiting, and Friday when PCE inflation data is coming out. Such special reports might furnish the readers with information about the prospects for the Fed rate changes. In fact, it is something they all want to know.
The appreciating rupee is a reflection of greater currency market risk sentiment, as emerging affairs in Asian currencies are elevated. The latter part of this strong momentum is often backed by the global outlook, including the fall of the dollar index and the shining of the neighbouring economies like the Korean won and Indonesian rupiah.
Overall, the Indian rupee’s performance is intertwined with global economic trends and geopolitical factors. As investors assess incoming data and central bank policies, currency markets remain dynamic and responsive to changing conditions, impacting exchange rates and forward premiums alike.
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