By Jaspreet Kalra
MUMBAI (Reuters) – The Indian rupee ended slightly weaker on Friday as buoyant U.S. dollar demand from local companies offset the positive cues from strength in its Asian peers.
The rupee closed at 83.27 compared with its close of 83.2325 in the previous session. The currency was rangebound between 83.01 and 83.3325 this week and ended largely unchanged from last Friday.
Asian currencies rose amid a pullback in U.S. Treasury yields after economic data aided expectations that the U.S. labour market is cooling. The 10-year U.S. bond yield last quoted at 4.39%, its lowest level since September.
Brent crude oil futures were up slightly on Friday but the contract has fallen over 11% so far in November because of concerns about weaker global demand.
The rupee has been unable to gain from these favourable cues in the face of persistent dollar demand from local importers, traders said.
A sizeable drop in the dollar-rupee pair is unlikely anytime soon as the pair is likely to remain “bought on dips”, a foreign exchange trader at a state-run bank said.
“The rupee should continue consolidating between 83 and 83.30 in the near-term but is likely to head lower eventually,” said Dilip Parmar, a foreign exchange research analyst at HDFC Securities.
The dollar index was on course to register a weekly drop of over 1% as investors raised bets that the Federal Reserve would begin easing policy rates next year.
Market participants are pricing in rate cuts of 100 basis points in 2024, beginning from May.
Investors await the minutes of the Fed’s October meeting, which are due on Tuesday, and could offer cues on the central bank’s thinking on future policy rates.
(Reporting by Jaspreet Kalra; Editing by Mrigank Dhaniwala)