Indian rupee rises against UAE dirham in early trade

The South Asian currency had opened at 22.141, its highest level in over a month

By Web Desk/Reuters

  • Follow us on
  • google-news
  • whatsapp
  • telegram

 

Published: Fri 13 Jan 2023, 11:38 AM

The Indian rupee rose against the UAE dirham on Friday following another fall in the US inflation rate, while forward premiums rose to their highest level in two months.

The rupee was trading at 22.183 to the UAE dirham by 9.20am UAE time, compared with 22.22 in the previous session. The currency had opened at 22.141, its highest level in over a month.


It is not a surprise that USD/INR has recovered after the open, a forex salesperson at a private sector bank said. The pair has witnessed a decent dip for importers to jump in, the trader added.

A trader at the same bank pointed out that public sector banks bought dollars at the open, but it was difficult to confirm whether it was for their clients or on behalf of the Reserve Bank of India.


The rupee and other Asian currencies were helped by the dollar's slump against its major peers following the US inflation data. US consumer prices on a month-on-month basis fell for the first time in more than 2.5 years in December, providing good news on inflation

The data instilled more confidence among traders that the Fed is likely to downshift to a 25-basis point hike at the January 31-February 1 meeting. Fed futures now show just a 6 per cent chance of a bigger rate hike, according to the CME FedWatch Tool.

"This month's report provides confirmation that the downshift in inflation pressures is becoming entrenched, setting the stage for another reduction in the pace of rate hikes," Morgan Stanley said in a note.

Tracking the fall in Treasury yields following the inflation data, rupee forward premiums rose. The 1-year implied yield rose to 2.26 per cent, the highest since November.

ALSO READ:



More news from Business