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UAE: Indian rupee slips against dirham, tracking yuan's slide in early trade
The offshore Chinese yuan dropped to 7.2140 to the dollar, headed for its fourth straight day of declines, on persistent pessimism regarding the Chinese economy
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The Indian rupee dropped on Wednesday, pressured by the yuan's fall on worries over China's growth outlook.
The South Asian currency was trading at 82.09 to the US dollar (22.37 versus the UAE dirham) at 9.40am, with the range set at 82.08 to 82.13 (22.37 to 22.38 against the dirham). The rate marked a dip from 82.03 on Tuesday.
[Editor's Note: For real-time forex rates, click the widget below or visit KT's dedicated Trading News page here.]
With the yuan "back to losing ways", the rupee was expected to struggle at the open, a forex trader said.
"Anyway, (USD/INR) was not managing to slip below 82 and now we have an excuse to take it to the 82.20-82.30 resistance."
The rupee has repeatedly failed to scale the 82 handle despite equity inflows, thanks to likely intervention by the Reserve Bank of India, according to traders.
They estimate the central bank has set a floor for USD/INR at 81.80-81.90.
The offshore Chinese yuan dropped to 7.2140 to the dollar, headed for its fourth straight day of declines, on persistent pessimism regarding the Chinese economy.
Deutsche Bank on Tuesday became the latest Wall Street brokerage to lower its forecast for China's 2023 economic growth. On Monday, J.P.Morgan, Morgan Stanley and Citigroup had trimmed their forecasts.
Tracking the yuan, most other Asian currencies declined. The dollar index managed to inch higher to 100.
US data on Tuesday was a tad weaker than expected, with retail sales increasing 0.2 per cent on-month in June, versus 0.5 per cent expected, while industrial production fell a further 0.5 per cent.
The data, however, did not impact risk appetite or bond yields. The S&P 500 index rose to its highest since April 2022 and the two-year U.S. yield inched up to 4.75 per cent.
The next important event is the Federal Reserve's meeting next week. A 25 basis points rate hike has been fully priced in.
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