Rupee likely to rise after an 8-day fall

The rupee could snap an 8-day slide and open higher on Thursday, tracking gains in regional equities and a stronger euro.

* All eyes are on Friday’s monetary policy review of the Reserve Bank of India (RBI) which will give direction to local shares and in turn the rupee. According to a Reuters poll, most expect the central bank to raise rates for the last time in its 18-month long tightening cycle.

[caption id=“attachment_84404” align=“alignleft” width=“380” caption=“All eyes are on Friday’s monetary policy review of the Reserve Bank of India (RBI) which will give direction to local shares and in turn the rupee. Reuters”]  [/caption]

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* The wholesale price index in August climbed to 9.78 percent, its highest in more than a year as prices of food and manufactured goods surged, reinforcing the case for tightening policy despite weakening growth and a worsening global outlook.

* Traders expect the rupee to open around 47.60-47.65 per dollar and move in a 47.45-47.80 band. It had closed marginally weaker on Wednesday at 47.62/63, after hitting 48.02 – its lowest since September 29, 2009.

* The euro held on to gains against the dollar in another volatile session on Thursday, boosted by stronger stocks and calming words from European leaders about Greece’s future, but sentiment remains extremely fragile.

* At 0257 GMT, the euro was at $1.3731, off its three-day peak of $1.3873 and higher than $1.3724 when the rupee closed on Wednesday.

* The MSCI index of Asian stocks ex-Japan was up 1.3 percent. The Nifty India stock futures traded in Singapore were up 0.3 percent.

Reuters