Indian Rupee Edges Up Against UAE Dirham Supported By Stronger Asian Currencies
Date
8/29/2024 4:52:19 AM
(MENAFN- Khaleej Times)
The Indian rupee edged up on Thursday, supported by stronger Asian currencies and anticipated MSCI-related inflows.
The rupee traded at 22.86239 against the UAE dirham at 9.22am UAE time, improving from 22.87534 in the previous session. Asian currencies rose between 0.1 per cent and 0.4 per cent, while the dollar index slipped to 100.94.
India's increased weighting in MSCI's emerging market index, effective Friday, is expected to attract up to $3 billion in inflows, according to Nuvama Alternative and Quantitative Research.
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While it was only a minor up move, the rupee "will take it, considering the extent of difficulty it has been facing", a currency trader at a bank said, adding that equity inflows were likely to provide only temporary relief to the rupee and that the currency will remain in a narrow range for now.
The rupee's annualised realised volatility, based on changes in daily prices, is at less than 2 per cent. The Reserve Bank of India has for a long time now keeping the currency on a tight leash.
The rupee has "no real story to write about" and has again settled into a range, Srinivas Puni, managing directors at fx advisory firm QuantArt Market Solutions, said.
Data points on the US labour market is expected to be key in the coming days.
"Given the focus of the Fed is now on the labour market, next Friday's US jobs data is the important event for the dollar and to some extent rupee. Until then, one can expect a meandering rupee in its range," Puni said.
Fed Chair Jerome Powell last Friday had said that any further cooling in the U.S. labour market would be unwelcome. In veiw of this, a significantly weak jobs report may prompt the Fed to cut rates by 50 basis points next month, according to analysts.
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