USDINR Extends Decline Towards 82; Dollar Index Wallows Below 100 Mark

Published on Jul 13, 2023 16:49

USDINR extended losses through the day after a gap down opening on Thursday as dollar overseas strayed sharply lower. The pair on the NSE futures opened at 82.15 and dropped to a low of 81.99 before settling the day at 82.12, down 0.25% on the day. Softer than expected US inflation data that came in at an annual 3% in June, its lowest since Mach 2021 is expected to keep the Federal policymakers to turn less hawkish on interest rate hikes. This coupled with slower pace of growth in jobs market as revealed last week is dragging down the US benchmark treasury yields alongside dollar. US 2 year and 10 year yields are off recent highs and quoting at 4.7% and 3.8% respectively, reducing beats of a Federal rate hike soon.

Meanwhile, the dollar index dropped below 100 mark for the first time in more than a year. DXY that measures the greenback against a basket of currencies is quoting at 99.93, down 0.27% on the day. Weakness in the dollar index is benefitting gains in the other currencies within the basket. EURUSD registered an impressive gain above $1.12 whereas GBPUSD is hovering above $1.30, up 0.5% on the day. Meanwhile, the yen which has gained more than 3% this week has strengthened by 0.12% against the dollar to 138.44.