CURRENCY OVERVIEW

The Rupee opened on  Thursday with an upside bias, after Asian currencies were largely rangebound despite a rise in U.S. Treasury yields following robust U.S. jobs data. Asian currencies were mixed and largely range-bound on Thursday, reflecting a muted reaction to January's upside surprise in U.S. nonfarm payrolls. The dollar index initially climbed alongside higher U.S. Treasury yields, as the strong jobs data tempered expectations of U.S. Federal Reserve rate cuts, before retreating below the 97 threshold. U.S. equities were mostly flat on Wednesday, while 10-year Treasury yields rose about 3 basis points. Economists cautioned that the headline strength may overstate the underlying health of the labour market. Although data from the Labour Department showed a robust print, analysts noted that such releases are often subject to sizable revisions and should be interpreted with care. The bank highlighted that 2025 job growth was revised down to 181,000 from 584,000, averaging roughly 15,000 per month, underscoring the softness in the labour market. For the rupee, which has been establishing a 90-91 range following its initial rally on the back of the U.S.-India trade deal, the latest U.S. jobs data "changes nothing", a currency trader at a bank said. The rupee's reaction to external cues has anyway been limited in recent sessions, and with the payrolls report failing to significantly move other asset classes, the focus shifts back to local dollar flows and positioning, the trader added. A resurgent yen, runaway Aussie and steadily rising yuan had the dollar under pressure on Thursday and drifting toward a weekly drop, as investor focus turned to the next batch of U.S. labour and inflation data. A stronger-than-expected U.S. jobs report overnight briefly lifted the greenback. But traders are taking recent signs of U.S. economic resilience as cues for a broader brightening in global growth and are laying bets on Japan as a likely winner. The yen is up more than 2.6% since Prime Minister Sanae Takaichi's Liberal Democratic Party swept to a landslide victory at Sunday's election and a mood shift seems to be afoot as markets set aside fears about spending to focus on growth. Against the dollar, the yen traded as strong as 152.55 on Wednesday, before steadying slightly below that at 153.05 per dollar on Thursday. The rebound is nascent - since the yen has been declining for years - but it has been big enough to turn heads in the market. Yen gains could easily accelerate, analysts said, if it broke past resistance around 152 per dollar, or even the 200-day moving average at 150.5. It has also made headway against crosses, rising 2% on the euro in two sessions and breaking to the strong side of a 50-day moving average. The euro was firm at $1.1875, sterling held at $1.3628 and the kiwi at $0.6052. The other major mover on the dollar in recent weeks has been China's yuan , which has been a steady gainer on the back of booming exports and hints from authorities that China may tolerate a stronger currency. Corporate demand ahead of the Lunar New Year holiday helped it to a 33-month top of 6.9057 per dollar on Wednesday and in offshore trade on Thursday it was a fraction firmer still at 6.9025. This week the U.S. dollar index is down 0.8% to 96.852. In terms of potential catalysts, U.S. jobless claims figures are due later on Thursday and January inflation data is due on Friday. Oil prices edged up on Thursday morning as investors worried about escalating tensions between the U.S. and Iran. Brent crude oil futures were up 34 cents, or 0.49%, at $69.74 a barrel at 0126 GMT. U.S. West Texas Intermediate crude rose 37 cents, or 0.57%, to $65.00.

www.eforexindia.com 

The rupee closed modestly weaker on Wednesday as dollar demand from local corporates and on account of maturing positions in the non-deliverable forward (NDF) market blunted positive cues from gains in most regional peers. The rupee ended at 89.7850 per U.S. dollar, down about 0.1% on the day. Most Asian currencies edged higher but traders said local flow dynamics continued to dominate price action for the rupee, even though it has bounced back from the record-low levels hit last week. The maturity of positions in the NDF market also spurred dollar-buy bids at the daily reference rate, a trader at a Mumbai-based bank said. While price-action in the spot market was largely contained, dollar-rupee forward premiums declined sharply after the Reserve Bank of India announced it will conduct a 3-year $10 billion FX swap next month. The 1-month dollar rupee forward premium fell nearly 15 paisa and the 3-year forward premium was down over 50 paisa. The Japanese yen gained modestly against the U.S. dollar on Wednesday as traders focused on whether weakness in the Japanese currency will prompt officials in the country to intervene. Volumes are light ahead of Thursday’s Christmas Day holiday, when U.S. and many international markets will be closed. The Japanese currency was last up 0.25% on the day against the U.S. dollar at 155.84 per dollar. The dollar reached 157.77 yen on Friday. The dollar was otherwise mixed. The dollar index , which measures it against a basket of other currencies, including the yen and the euro, rose 0.07% to 97.96, with the euro down 0.14% at $1.1778. Sterling weakened 0.13% to $1.3498. The Australian dollar strengthened 0.07% to $0.6705 and the Canadian dollar gained 0.11% to C$1.367 per U.S. dollar. The U.S. currency has fallen this year as the Federal Reserve cuts rates, with more easing expected next year while analysts expect other central banks to have completed their rate reductions. Oil settled marginally lower on Wednesday, and prices were on course for their steepest annual decline since 2020 as investors weighed U.S. economic growth and assessed the risk of supply disruptions from Venezuela and Russia. Brent crude futures closed down 14 cents, or 0.2%, at $62.24 a barrel, while U.S. West Texas Intermediate crude eased 3 cents, or 0.05%, to $58.29

The rupee closed weaker on Friday , pressured by dollar demand linked to maturing non-deliverable forward positions and corporate hedging as global markets awaited a key U.S. Supreme Court ruling on trade tariffs. The currency closed at 90.1625 against the U.S. dollar, down 0.1% on the day but little changed week-on-week. Traders pointed to heightened dollar demand at the central bank's daily reference rate and hedging activity from companies, which weighed on the local unit on Friday. State-run banks were intermittently spotted offering dollars near the day's low for the rupee, which helped limit its losses, two traders said. The central bank stepped in firmly to shore up the currency earlier in the week, but traders said the rupee remains vulnerable without progress in U.S.-India trade talks, or a reversal in portfolio outflows. The dollar gained on Friday after data showed slower than expected U.S. jobs growth, suggesting the Federal Reserve could leave interest rates unchanged later this month. The dollar rose marginally across peer currencies as the data before paring those gains. The greenback was up 0.72% to 158 against the Japanese yen and was up 0.25% to 0.801 against the Swiss franc . The euro was down 0.22% against the dollar at $1.1633. The dollar index rose 0.27% to 99.14. Oil prices rose on Friday on concerns about potential disruption to Iran's output and uncertainty about supply from Venezuela. Brent futures were up 50 cents, or 0.8%, to $62.49 per barrel at 1359 GMT, while U.S. West Texas Intermediate (WTI) crude was up 51 cents, or 0.9%, to $58.27.