Key Points:
The Indian rupee (Symbol: USDINR) is poised to remain near its weakest level of 84 against the U.S. dollar as markets await crucial U.S. jobs data, which could shape the Federal Reserve’s interest rate decision at its upcoming September meeting.
Picture: USDINR hovering near its record low, as observed on the VT Markets app.
After touching a low of 83.9850 on Thursday, the rupee managed to avoid crossing the psychological 84-mark, thanks to intervention from the Reserve Bank of India (RBI).
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While the U.S. dollar struggles against its major peers and most Asian currencies, the moves of the rupee are expected to remain subdued. Investors are focusing on the U.S. jobs data, which could influence market sentiment around the Federal Reserve’s next steps. A weak U.S. labour market report could push the Fed toward a more aggressive 50-basis-point rate cut, while a stronger jobs report may lead to a more conservative 25-bps reduction.
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U.S. economic data, especially the labour market report, could trigger some position adjustments across the broader forex market, but not necessarily for the rupee, as traders do not anticipate any dramatic shifts.
What you should look out for
A significant break below the 84-mark could create opportunities for intraday volatility. However, interventions from the RBI are likely to keep any sharp declines in check, making the Indian currency a low-volatility play compared to other major currencies. The markets are keeping an eye on the U.S. jobs data, as the Fed’s next rate move will influence market sentiment and possibly create some movement in the USDINR currency pair.
