By Jaspreet Kalra
MUMBAI (Reuters) – The Indian rupee closed little changed following muted trading on Monday on a lack of fresh triggers at the start of the year.
The rupee ended at 83.2375 against the U.S. dollar, slightly lower from its close at 83.2075 in the previous session.
Most global markets were shut on Monday on account of the New Year’s holiday.
While the rupee notched some gains early in the session, dollar buying from state-run banks weighed on the unit, a foreign exchange trader at a private bank said.
Trading volumes were relatively lighter, the trader added.
The dollar index notched its second consecutive monthly loss in December and fell about 2% amid growing expectations the Federal Reserve may begin easing rates soon.
For the year gone by, the dollar index fell 2% as well, marking its first annual loss since 2020.
Market participants are currently pricing in a very high probability the Fed will cut rates at its March meeting.
While this has sparked gains in most Asian currencies, the rupee has been a laggard amid strong local dollar demand and on likely absorption of inflows by the Reserve Bank of India, traders said.
In the near-term, the rupee “appears to be stuck,” in its prevailing range with strong hurdles at 83 and 83.50, said Dilip Parmar, a foreign exchange research analyst at HDFC Securities.
Meanwhile, India’s benchmark equity indexes Nifty 50 and Sensex hit record highs in the first session of 2024.
Investors now await key U.S. economic data later this week including non-farm payroll and unemployment data due on Friday.
The U.S. unemployment rate is expected to have risen to 3.8% in December, up from 3.7% in November, according to a Reuters poll.
(Reporting by Jaspreet Kalra; Editing by Mrigank Dhaniwala)