INDIA RUPEE-Rupee poised to weaken on more hawkish Fed repricing

The Indian rupee is expected to weaken against the US dollar at the opening of the financial markets in India on Friday, April 11, 2023, according to market analysis published on MarketScreener. This prediction is based on the increasing likelihood that the Federal Reserve (Fed) in the United States will delay any planned interest rate cuts in response to higher inflation rates in the US economy.

The non-deliverable forwards (NDFs), which are used to hedge against currency risk in the offshore market, suggest that the rupee will start trading at around 83.32-83.34 against the US dollar. This represents a significant increase from the previous day's closing rate of 83.1850.

The reason for this anticipated depreciation of the rupee is the growing expectation that the US Federal Reserve will adopt a more hawkish stance towards monetary policy. This means that the Fed is less likely to cut interest rates, which would make the US dollar a more attractive investment compared to the rupee.

The strengthening US dollar, in turn, would lead to an increase in US Treasury yields, making it even less attractive for investors to hold the rupee. This dynamic is expected to put downward pressure on the value of the Indian currency in the foreign exchange market.

It is important to note that this analysis is based on current market expectations and is subject to change based on new information or developments in the global economy. Additionally, the rupee's value against other major currencies, such as the Euro or the Japanese Yen, could also be influenced by factors specific to those currencies and their respective central banks' monetary policies.

In summary, the Indian rupee is expected to weaken against the US dollar at the opening of the financial markets in India on April 11, 2023, due to the increasing likelihood of the Federal Reserve delaying interest rate cuts and the resulting strengthening of the US dollar and US Treasury yields. This analysis is based on market analysis published on MarketScreener and is subject to change based on new information or developments in the global economy.