Indian rupee eyes flat open as dollar gains

The Indian rupee is expected to open flat to slightly weaker on Tuesday, tracking a decline in Asian currencies and a rise in the dollar index, as reported by Reuters.

Non-deliverable forwards suggest the rupee may open at 83.33-83.36 against the US dollar, slightly higher than Friday’s close of 83.3350.

The increase is attributed to dollar selling by public sector banks and stop-loss triggers. Analysts remain cautious about a sustained uptrend.

The broader Asian currency market is facing headwinds, with the Chinese yuan and Japanese yen both depreciating against the dollar. This, coupled with a rise in the dollar index to 104.66, is putting pressure on the rupee.

The recent rise in US Treasury yields and the dollar index is due to the Federal Reserve’s cautious approach to interest rate cuts.

Despite lower-than-expected inflation data, Fed officials, including Vice Chair Philip Jefferson, are hesitant to declare victory prematurely.

Investors are looking forward to the release of the May Fed meeting minutes this week for more information on the Fed’s inflation worries.