Rupee declines pressured by weak Asian peers, oil companies' dollar bids
![](https://m.economictimes.com/thumb/height-450,width-600,imgsize-16234,msid-111421787/rupee.jpg)
Synopsis
Indian rupee weakens as Asian currencies fall amid strong dollar demand. US bond yield rise impacts currencies, with Chinese yuan and Korean won leading losses.
A rise in US bond yields hurt Asian currencies on Tuesday with the Chinese yuan dropping to its lowest since November and the Korean won falling 0.4% to lead losses.
The 10-year U.S. Treasury yield climbed to its highest level since May on Monday on heightened odds of a second U.S. presidential term for Donald Trump.
"There are strong bids (on USD/INR) from oil companies and then you have the weakness in Asian currencies... both factors should keep the rupee under pressure but the RBI may step in to supply near 83.60," a foreign exchange trader at a foreign bank said.
Traders expect the Reserve Bank of India (RBI) to intervene to prevent the rupee from falling to the record low of 83.6650 hit last month.
"We maintain our reasonably constructive view on INR ... (and) continue to expect the RBI to remain active to curb FX volatility moving forward," MUFG Bank said in a note, projecting that the rupee will gain to 83 by the end of 2024.
Stocks Recommendations
Investors now await remarks from Federal Reserve Chair Jerome Powell and US job openings data, both due later in the day, for cues on the future U.S. policy rate path.
Interest rate futures currently indicate 65% odds of a rate cut in September, according to CME's FedWatch tool.
(You can now subscribe to our ETMarkets WhatsApp channel)