Indian Rupee Poised to Rise as Dollar Weakens on Increased Jobless Claims

The Indian rupee is expected to open higher on Friday as the US dollar weakened due to increased jobless claims, raising the likelihood that the Federal Reserve will refrain from raising interest rates in the upcoming week. Non-deliverable forwards suggest the rupee will open at around 82.44–82.46 against the US dollar, compared to the previous session’s close at 82.5625. The rupee showed little response to the Reserve Bank of India’s policy decision. Speculative interest in the currency pair is currently low due to low volatility and lack of direction.

The weakening of the dollar was driven by data showing a surge in new claims for unemployment benefits in the US, indicating a potential pause in the Fed’s rate hike plans. The odds of a rate hike at the June 13–14 meeting are now at 1-in-4. Asian shares rose following the positive sentiment in the US market, while currencies in the region also gained. The next key event for Asia will be the US inflation data, which could impact the possibility of a Fed rate hike.