Indian rupee slips as US yields rise

The Indian rupee slowed against the US dollar on Monday, falling to 83.46 compared to its previous close of 83.3825 at 10:15 am IST. This decline aligns with a broader trend of weakness in most Asian currencies due to a rise in US bond yields.

The Chinese yuan and Japanese yen have seen depreciation in recent weeks, putting pressure on the rupee. Additionally, the Chinese central bank‘s decision to allow a weaker yuan is adding to concerns.

While recent US inflation data hinted at a slowdown, the possibility of former President Trump’s re-election is pushing US bond yields higher. The 10-year yield rose five basis points to 4.39 per cent on Friday.

Although India’s inclusion in the JPMorgan emerging market debt index provided some support to the rupee last week, inflows of $198 million Friday fell short of expectations.

Analysts expect the rupee to face pressure this week due to key US data releases, but they predict limited downside with support around 83.30 on the USD/INR pair as long as the dollar index weakens.

Attribution: Reuters