The rupee opened flat against the US dollar on Friday as a jump in US jobless claims and falling producer prices raised concerns that the Fed may postpone its policy easing decision.
The local currency opened at Rs 83.54 against the greenback, unchanged from Thursday’s close.
Brent oil prices were on track to weekly gains, as Brent was at $82.42 per barrel on a solid demand outlook. US Initial Jobless Claims for the week ended June 7 jumped to 242,000, above the forecast 225,000 and the previous week’s 229,000.
The US Producer Price Index in May contracted by 0.2%, missing the forecast of 0.1% and declining further from the previous 0.5%. Core US PPI (excluding volatile food and energy prices) ticked down to 2.3% year-on-year versus the forecast hold at 2.4%.
The dollar index was 105.21, while 10-year US bond yields were 4.2650%. According to the CME FedWatch Tool, the probability of a September rate cut remains above 65%, keeping market hopes alive.
“Both are important predictors of the health of the US job market and inflation, hinting towards a not-so-resilient situation,” Amit Pabari, the Management Director of CR Forex Advisors, said.
“Given the nervousness surrounding the budget due in July, a sustained trend reversal in the inflows could be seen post-Budget as investors seek clarity on policy continuity to make fresh investments,” Pabari said.
“For USDINR, Rs 83.45 will act as a support while Rs 83.60 is an immediate resistance followed by Rs 83.72,” Kunal Sodhani, Vice President Of Shinhan Bank, said.
