rupee vs dollar: Rupee closes marginally lower at 83.53 against dollar

Mumbai: The rupee weakened slightly versus the dollar on Wednesday due to caution ahead of the US Federal Open Market Committee (FOMC) minutes and the US non-farm Payroll (employment) data. The minutes and the NFP data are expected on Friday.

The rupee closed at 83.53/$1 on Wednesday, versus the previous close at 83.50/$1, LSEG data showed.

“Yesterday Powell (US Federal Reserve Chair) in his speech was dovish, and this caused the dollar index to fall a little. The NFP data and FOMC minutes expected on Friday will cause a bit of volatility in the market”, said Anil Bhansali, Head of Treasury at Finrex Treasury Advisors.

Jerome Powell said that the US is back on a “disinflationary path” in his latest speech, causing bond yields in the US to fall.

Most Asian currencies fell versus the dollar on Wednesday, along with Brent crude oil prices being higher than yesterday at $86.56 per barrel, increasing 0.37% from the previous day, according to Reuters. A rise in crude oil prices poses upside risks to Indias’ trade deficit and inflation as the country is a major importer of the commodity. The 10-year benchmark government bond yields in India eased a little, closing at 6.99% on Wednesday, after remaining steady at 7.0%-7.01% in the last couple days. The bond market is also looking out for the NFP data to come in the next couple days, and the budget to be announced by the end of this month. “The main thing for the bond market will be NFP data and the budget, because we are expecting borrowing numbers to decrease. If that does not happen and capital expenditure is given a push by the government, then we might see yields go up to 7.05% to 7.10%”, said a trader at a public bank.