Dollar path, India rupee to take hints from tariff reaction; Bonds for eye liquidity

By Dharamraj Dhutia and Nimesh Vora

Mumbai, February 17 (Reuters) – This week the direction of the Indian rupee will be shaped by the dollar response to its recent improvement and whether concerns on the US tariffs are decreasing, while the bond market is getting less, while the bond market is any further liquidation infusion measures Will be on the clock. Central bank.

The rupee ended at $ 86.8225 per US dollars on Friday, ralling 0.7% a week, which was the best performance in more than one and a half years.

This was largely due to the heavy intervention of the Reserve Bank of India, while an additional boost came from the lack of any American tariff implemented last week, as US President Donald Trump said.

Kunal Kurani, Associate Vice President at the McLee Financial, said that after the rally, those who probably squeeze the positions, the rupee is expected to track the dollar step more widely.

The dollar index recorded a decline of nearly 1% last week-and is about 3% below the year-over year-over-year-time-because Washington’s mutual tariffs were not implemented immediately.

Kurani said that any development related to tariff will remain in meditation, which he warns, can stop the recovery of the rupee.

Traders said that the currency is expected to be within the range of 86.50–87.20.

While the rupee rally, the benchmark 10-year-old bond yield was largely unchanged, ended at 6.7071% on Friday.

Traders hope that 6.65% -6.75% range will be produced this week.

Last week narrow 6.68% -6.73% range was due to cautious feeling after RBI reduced the expectations of additional liquidity infusion.

RBI cut interest rates in 25 basis points, but did not unveil fresh liquidity injection measures. Instead, its comment was also in the cautious side, according to the market participants.

ICICI Securities Primary Dealership said, “We maintain a view of 25 BPS rate cut in April meeting, followed by another cut later in the financial year (in October, even about that time The more unknowable), “ICICI Securities Primary Dealership said. A comment.

It states that the minutes of the RBI policy meeting on Friday will provide more signs.

In the last one month, the Central Bank has infected a 2.68 trillion rupee ($ 30.88 billion) in the banking system.

This includes 600.20 billion rupees open market bond purchases, Rs 388.15 billion secondary bond purchases, about 440 billion rupees/swap of Rs 440 billion/Rs 1.25 trillion through a long -term repo.

It is scheduled to buy a bond of Rs 400 billion on Thursday.

However, the market is waiting for the next set of steps from the Central Bank, given that the liquidity has been scheduled to carry forward in the run-up by the end of the financial year.

** February HSBC Flash Manufacturing, Services and Composite PMI – February 21, Friday (IST)

** Minutes of February Monetary Policy Meeting of Reserve Bank of India – 21 February, Friday (IST at 5:00 pm)

** January housing begins – 19 February, Wednesday (7:00 pm IST)

** February 10 to 10 February – 20 February, Thursday (7:00 pm IST) for the initial weekly unemployed week

** February Phili Fed Business Index – February 20, Thursday (IST at 7:00 pm)

** February S&P Global Flash Manufacturing, Services and Composite PMI – February 21, Friday (8:15 am IST)

** January existing home sales – 21 February, Friday (8:30 pm IST)

** February U Mich Sentment – 21 February, Friday (IST) ($ 1 = 86.7890 Indian rupees) (Reporting by Dharamraj Dhutia and Nimesh Vora; Editing by Savio D’Suja)