By Sethuraman N R
MUMBAI (Reuters) – The Indian rupee weakened on Thursday, closer to the near two-week lows hit earlier this week, weighed by broad strength in the dollar index.
The rupee closed at 82.09 to the U.S. dollar on Thursday, against the previous session’s 81.9850.
The dollar index rose 0.46% on Thursday after holding stable following U.S. inflation numbers on Wednesday.
“What we saw in rupee is more of reflections of the dollar index. There were no major inflows or outflows during the day,” said Dilip Parmar, research analyst at HDFC Securities.
Asian currencies were also mostly weaker through the day.
If the support at 81.85 for USD/INR holds, another upswing is possible, which may not be directional, until the resistance at 82.2 is broken, said Anand James, chief market strategist at Geojit Financial Services
Meanwhile, the U.S. inflation, which slowed slightly more than expected last month, offered little clues to the Federal Reserve’s rate trajectory.
“Overall, the CPI outcome shall support the view that the Fed is done tightening, but it may not be dovish enough to justify the hefty rate cuts currently priced by the market,” analysts at OCBC wrote in a note.
Futures indicate a rate cut in September.
Markets are waiting for a rate decision from the Bank of England later in the day while also watching India’s inflation numbers, due Friday.
(Reporting by Nallur Sethuraman in Mumbai; Editing by Dhanya Ann Thoppil)
