Outflows, cenbank intervention may squeeze Indian rupee; bond yields to track US peers
By Dharamraj Dhutia and Jaspreet Kalra
MUMBAI, Oct 21 (Reuters) -The Indian rupee may face pressure this week due to outflows related to Hyundai Motor India's initial public offering and a steady exodus of foreign money from local stocks, while bond yields will track U.S. peers and the central bank's policy minutes.
The rupee INR=IN closed at 84.0650 against the U.S. dollar on Friday, after hitting a record low of 84.0775 earlier in the day. The currency was little changed week-on-week.
A sharp pickup in outflows from local equities has hurt the rupee, with overseas investors offloading $8.4 billion worth of stocks so far this month.
Analysts expect the outflows to continue as global fund managers have shifted their focus to Chinese equities after Beijing's bumper stimulus. Tepid earnings from marquee large-cap firms have also added to the exodus.
With Hyundai Motor India's South Korean parent expected to take the funds raised via the $3.3 billion IPO back home, the rupee could face additional pressure this week but the Reserve Bank of India (RBI) is "likely to stay on guard," a trader at a state-run bank said.
Routine interventions by the central bank have protected the currency against sharp declines despite the upswing in outflows, traders said.
Traders expect the rupee to hover between 83.90 and 84.20 this week.
The RBI is expected to defend the rupee "in the face of large dollar outflows," Abhilash Koikkara, head of forex and rates at Nuvama Professional Clients Group, said.
Investors will monitor developments in the U.S. presidential race and also keep an eye on remarks from Federal Reserve policymakers this week for cues on the outlook for interest rates.
Meanwhile, India's 10-year benchmark government bond yield IN071034G=CC closed at 6.8193% on Friday, up 3 basis point for the week, after rising 4 bps in the prior week.
Traders expect the yield to be in the 6.78%-6.85% band this week, with the major focus on moves in U.S. counterparts, oil prices and the minutes of the RBI's latest monetary policy meeting on Wednesday.
The 10-year U.S. yield US10YT=RR stayed above the 4% mark on Friday, while the benchmark Brent crude contract eased below $75 per barrel last week, easing some inflationary pressures.
Earlier this month, the RBI had kept its key interest rate unchanged, as expected, but loosened its policy stance to "neutral", opening the door for rate cuts as early as December.
However, a spike in September retail inflation to a nine-month high of 5.49% has led many economists to push their rate cut expectations to first-half of 2025.
"We continue to await more clarity from domestic and global data as well as the minutes of the latest Monetary Policy Committee meeting to gain conviction about our long-held view that committee will deliver first rate cut in February 2025 meeting rather than earlier," said Abhishek Upadhyay, senior economist at ICICI Securities Primary Dealership.
KEY EVENTS:
** Minutes of Reserve Bank of India's October meeting - Oct 23, Wednesday (5:00 p.m. IST)
** U.S. September existing home sales - Oct 23, Wednesday (7:30 p.m. IST)
** India October HSBC flash manufacturing, services and composite PMI - Oct 24, Thursday (10:30 a.m. IST)
** U.S. initial weekly jobless claims week to Oct. 14 - Oct. 24, Thursday (6:00 p.m. IST)
** U.S. October S&P Flash manufacturing, services and composite PMI - Oct. 24, Thursday (7:15 p.m. IST)
** U.S. September new home sales - Oct. 24, Thursday (7:30 p.m. IST)
** U.S. September durable goods - Oct. 25, Friday (6:00 p.m. IST)
** U.S. October U Mich sentiment - Oct. 25, Friday (7:30 p.m. IST)
Reporting by Dharamraj Dhutia and Jaspreet Kalra; Editing by Sonia Cheema
免责声明: XM Group仅提供在线交易平台的执行服务和访问权限，并允许个人查看和/或使用网站或网站所提供的内容，但无意进行任何更改或扩展，也不会更改或扩展其服务和访问权限。所有访问和使用权限，将受下列条款与条例约束：(i) 条款与条例；(ii) 风险提示；以及(iii) 完整免责声明。请注意，网站所提供的所有讯息，仅限一般资讯用途。此外，XM所有在线交易平台的内容并不构成，也不能被用于任何未经授权的金融市场交易邀约和/或邀请。金融市场交易对于您的投资资本含有重大风险。
所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。
本网站上由XM和第三方供应商所提供的所有内容，包括意见、新闻、研究、分析、价格、其他资讯和第三方网站链接，皆保持不变，并作为一般市场评论所提供，而非投资性建议。所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为适用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。请确保您已阅读并完全理解，XM非独立投资研究提示和风险提示相关资讯，更多详情请点击 这里。
