By Anushka Trivedi
MUMBAI (Reuters) – The Indian rupee was little changed to the U.S. currency on Tuesday, tracking a muted dollar, as markets awaited a host of data from the world’s top economy to find direction this week.
The rupee was at 82.76 per dollar at 10:40 a.m. IST, against its previous close of 82.7375.
There were hardly any dollar offers in the market, but as European investors return from holiday later in the day, an uptick in the rupee is possible, a trader said.
Although, the currency unwilling to budge from its level despite a jump in Asian currencies “was surprising” and a range-bound movement till 82.85 cannot be ruled out, they added.
The currency has moved in the 82.40-83.00 range for the past three weeks. Market participants expect it to find a firmer direction in the latter half of January.
Emerging Asian currencies reversed earlier losses, tracking a jump in the Chinese yuan as it rose to an over four-month high.
Dealers told Reuters that COVID recovery in China was taking shape, with market participants gradually going back to the trading floors.
“One of the reasons for this divergence (between the rupee and Asian peers) could be that India’s rate hike cycle is much closer to an end than other countries'”, Elara Capital’s Garima Kapoor, an economist at Elara Capital, said.
Even if the size of the hikes is being reduced by some developed economy central banks, the commentary from the U.S. Federal Reserve has stayed quite hawkish, Kapoor added.
Meanwhile, the dollar index was flat around 103.500, as investors eyed U.S. manufacturing and jobs data this week along with minutes of the Fed meeting last month, to gauge where the central bank stands on the direction of its monetary policy.
The Fed had raised rates by 50 basis points (bps) in December after four consecutive increases of 75 bps each.
(Reporting by Anushka Trivedi; Editing by Janane Venkatraman)
