Rupee trades weak with US CPI in focus; opens 3 paise lower at 88.13/$

Indian Rupee today: The domestic currency opened 3 paise lower at 88.13 against the greenback on Thursday, according to Bloomberg

The Indian rupee traded slightly weaker on Thursday as investors awaited key US inflation data, seen as crucial for a possible Federal Reserve rate cut in the upcoming meeting. 

 

The domestic currency opened 3 paise lower at 88.13 against the greenback on Thursday, according to Bloomberg. So far this year, the rupee has depreciated 2.95 per cent, making it the worst performer among Asian peers.

 

The Indian rupee has remained range-bound in the last few sessions, unable to cross 88.20 and 87.95 on the higher side, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. The movement comes as the market keenly watches the Indian delegation back to the table with the US Negotiators on the tariff issue, while the RBI keeps selling dollars quietly near 88.20 levels. 

 

   

For the day, the rupee is expected to be between 87.80 to 88.30 levels, Bhansali said. The market sentiment is also driven by anticipation of the upcoming CPI release and the expectations of a larger Federal Reserve rate cut.  

 

Foreign Portfolio Investors (FPIs) turned net sellers in Indian equities worth ₹115.69 crore on Wednesday. So far this year, FPIs sold equities worth ₹1.4 trillion, according to NSDL. Asian currencies were also marginally lower, likely keeping buying interest in dollars at dips in the rupee, Bhansali said. 

 

The near-term outlook suggests the rupee could gradually regain lost ground towards 87.75, with 88.25 acting as a reversal point on the upside, according to Jateen Trivedi, VP research analyst - commodity and currency at LKP Securities. "The broader range remains intact between 87.75–88.25."

 

The dollar slightly rose after the US producer prices unexpectedly declined for the first time in four months in August. The dollar index, a measure of the greenback against a basket of six major currencies, was up 0.06 per cent at 97.83. 

 

Investors await CPI, initial jobless claims data, and the Federal Budget balance from the US. The Core CPI in the US, a measure of underlying inflation excluding food and fuel, is expected to rise 0.3 per cent for a second month, according to Bloomberg. In the Euro area, the ECB's decision on the interest rate is awaited.

 

In commodities, Brent oil prices were trading flat, maintaining a three-day gain despite mixed signals from global supply and geopolitical risks. Brent crude price was down 0.13 per cent at 67.40 per barrel, while WTI crude prices were lower by 0.11 per cent at 63.60 per barrel, as of 9:08b AM IST.