The Indian rupee is predicted to weaken as the dollar index reaches its highest level in two months and US Federal Reserve Chair Jerome Powell prepares to give a speech. Non-deliverable forwards suggest the rupee will open around 82.62-82.64 to the US dollar, compared to the previous session’s rate of 82.5725. The dollar index increased by 0.6% on Thursday and is expected to rise further, as factors including US equity declines, climbing US Treasury yields and positive labour market data contribute to its gains. Powell’s speech at the Jackson Hole Symposium is eagerly awaited for indications on future interest rate rises and US Treasury trends.
Powell’s speech is anticipated to receive significant attention, with many expecting a cautious approach to tightening and a focus on comprehensive data before considering further hikes in interest rates. The current global economic climate has contributed to the dollar’s strength against the rupee, and investors are keen to gauge Powell’s perspective on recent sell-offs in US Treasuries. There is consensus that the rupee’s momentum has suffered a setback after failing to break the 82.50 mark, and the overall bias in today’s session is expected to be on the downside. The performance of the dollar index, US equities, and US Treasury yields, as well as Powell’s speech, will likely influence the direction of the rupee’s value.