Indian Rupee: All Eyes On RBI

8 Jun 2022 , 09:08 AM

The Indian rupee is likely to stay cautious in opening trades on Wednesday, 08 June 2022 ahead of RBIs policy outcome. Besides, negative global cues, elevated oil prices, continuous selling by the FIIs and strength in dollar are expected to continue weighing down the domestic unit. Dollar index is regaining ground towards 102.55 after falling overnight tracking treasury yields that was down from the 3.062% highs during the week to lows of 2.963%. Investors look ahead to the Reserve Bank of Indias latest interest rate decision expected later today. After the 40 basis points off-cycle rate hike on 4 May 2022, RBI is widely expected to increase the policy rate further. On Tuesday, rupee that slipped more than 10 paise to close at 77.78 against the US dollar. At the interbank foreign exchange market, the local currency opened at 77.72 and witnessed an intra-day high of 77.69 and a low of 77.80 against the US dollar. The local unit finally settled at 77.78, down 11 paise over its previous close of 77.66. The domestic equity indices ended with steep losses on Tuesday, declining for the third straight session. The S&P BSE Sensex tanked 567.98 points or 1.02% to 55,107.34. The Nifty 50 index dropped 153.20 points or 0.92% at 16,416.35. Both the indices have fallen 1.27% in three sessions. Foreign portfolio investors (FPIs) sold shares worth Rs 2,293.98 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 1,311.14 crore in the Indian equity market on 7 June 2022, provisional data showed. The US Dow Jones index futures were down 17 points, indicating a flat to negative opening in the US stocks today. Asian shares rose on Wednesday. Japans economy shrank an annualized 0.5% in the first quarter, revised government data showed Wednesday. US stocks rose on Tuesday ahead of Fridays consumer price index reading for May. The S&P 500 climbed 0.95% to 4,160.68. The Dow Jones Industrial Average gained 264.36 points, or 0.8%, to 33,180.14. The Nasdaq Composite rose 0.94% to 12,175.23. The World Bank on Tuesday cut its global growth forecast to 2.9% for 2022 and warned of the world economy slipping into a period of stagflation reminiscent of the 1970s. Powered by Commodity Insights