The Indian rupee is expected to struggle at open versus the U.S. dollar on Friday tracking losses in other Asian currencies amid tepid risk appetite.
Non-deliverable forwards indicate the rupee will open at around 82.10-82.12 to the U.S. dollar compared with 82.09 in the previous session.
With the dollar doing well despite the weak U.S. data, USD/INR will likely be “slightly bid” at open, a spot trader said.
The respect for the recent high (on USD/INR) of 82.15 and “decent” resistance at 82.25-82.30 will, however, keep the upside in check at least in the initial part, he added.
Asian currencies were down between 0.3% and 0.6%, weighed by the dollar recovery against major peers. The offshore Chinese yuan dropped to 6.96 to the dollar.
The dollar index on Thursday had the best session in nearly two months despite data supporting current expectations that the U.S. Federal Reserve is done with rate hikes. The number of Americans filing new claims for unemployment benefits jumped to a 1-1/2-year high last week, pointing to cracks in the labour market.
Further, the U.S. producer price index rose 2.3% in April, the smallest year-on-year rise since January 2021 and following a 2.7% advance in March.
The dollar’s strength, despite the data, was put down by analysts to safe-haven demand amid renewed worries over U.S. regional banks.
Shares of a U.S. regional lender, PacWest Bancorp, plunged after it reported its deposits fell 9.5% last week and that it had posted more collateral to the Fed to boost its liquidity.
Renewed concerns regarding the state of some U.S. regional banks is pushing up demand for less risky investments, ANZ said in a morning note.
The S&P 500 Index and the Dow Jones Industrial Average dropped overnight.
