UAE: Indian rupee rises against dirham in early trade

The rupee appreciated three paise to 83.22 (Dh22.67) against the US dollar on Wednesday, tracking cues from positive equity markets and a weaker American currency against major rivals overseas.

However, selling pressure from foreign equity investors weighed on the Indian currency, forex traders said. At the interbank foreign exchange, the rupee opened at 83.20 and then touched 83.22 against the greenback, up 3 paise from its previous close.

"After the initial jump following the Israel conflict, oil has been more or less quiet, which is good for the rupee," a forex spot trader at a public sector bank said.

"In line with Asia, there will be a slightly offer-ish tone (on USD/INR) at open, following which it should be rangebound."

The dollar index has struggled since reaching a year-to-date high of 107.34 last Tuesday. U.S. Treasury yields, both near and far maturities, have similarly witnessed a pullback.

That has been largely attributed to indications that by Fed officials that more rate hikes may not be needed. A number of policymakers have suggested that the jump in long maturity Treasury yields has reduced the need to raise the policy rate further.

It's "possible" that the recent rise in yields on longer-term Treasuries means the Fed need not raise interest rates as much as otherwise, but it's hard to know definitively, Minneapolis Fed President Neel Kashkari said on Tuesday.

Atlanta Fed President Raphael Bostic outright said the U.S. central bank need not raise borrowing costs any further. Minutes of the Fed's September meeting are due during U.S. trading hours Wednesday.

The minutes from "might shed light on the Fed’s surprisingly hawkish guidance" at that meeting, Michael Hewson, chief market analyst, said.

With inputs from PTI/Reuters

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