Mild bearish bias for rupee on dollar strength; US-China talks eyed
MUMBAI, June 10 (Reuters) - The Indian rupee will likely see slight pressure on Tuesday in the wake of a mostly firm U.S. dollar, while the market focuses on the outcome of the U.S.-China trade talks.
The one-month non-deliverable forward indicated an open in the 85.63-85.66 range versus 85.62 in the previous session.
The dollar index was up 0.24% on the day, while the majority of the Asian currencies were slightly weaker.
"There's not much happening in Asia and the rupee anyway is essentially stuck in a narrow band," said a currency trader at a Mumbai-based bank.
"It'll likely be a session with a 20-paisa range at most," he said, adding that the bias, if any, leans modestly to the downside for the rupee.
The Reserve Bank of India's (RBI) larger-than-expected 50-basis-points interest rate cut on Friday has had little impact on the rupee so far, the trader pointed out.
The currency is marginally higher than it was before the RBI's outsized cut.
The market's attention is firmly fixed on updates from London, where the U.S. and Chinese officials are holding trade talks that are aimed at easing trade tensions between the world's two largest economies.
On Monday, U.S. President Donald Trump struck an optimistic tone, saying his administration was doing well and that he had received "good reports" on the progress of the discussions.
The meeting between the officials of the two countries is set to extend to a second day on Tuesday, with analysts noting that while headline risks around U.S. trade policy have diminished, significant concerns still persist.
The uncertainty remains elevated on U.S. trade policy amid concerns about the timeline of any bilateral trade deals and the legality of tariffs following the U.S. Court of International Trade ruling that declared most tariffs illegal, ANZ Bank said.
KEY INDICATORS:
** One-month non-deliverable rupee forward at 85.75; onshore one-month forward premium at 8 paise
** Dollar index up at 99.20
** Brent crude futures up 0.5% to $67.4 per barrel
** Ten-year U.S. note yield at 4.49%
** As per NSDL data, foreign investors bought a net $147.5 million worth of Indian shares on June 6
** NSDL data shows foreign investors bought a net $85.8 mln worth of Indian bonds on June 6
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