Indian rupee declines tracking Asian peers, forward premiums drop

The Indian rupee weakened on Monday tracking its Asian peers amid a pullback in hopes of policy easing by the U.S. Federal Reserve, which also prompted a decline in dollar-rupee forward premiums.

The rupee was at 83.4925 (Dh22.75) against the U.S. dollar as of 09:50 a.m. IST, down 0.1% from its close at 83.3725 on Friday.

Stronger than expected US labour market data boosted the dollar and U.S. bond yields as odds of September rate cut fell below 50%, according to CME's FedWatch tool.

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The dollar index was up 0.2% at 105.3, adding to Friday's gains, while the Korean won led losses in Asian currencies with a 0.9% fall.

Expect the dollar-rupee pair to be "overall biddish due to trimmed rate cute expectations," but the range continues to be 83.35-83.60, a foreign exchange salesperson at a large private bank said.

Dollar-rupee far forward premiums also dropped with the 1-year implied yield down 3 basis points at 1.58%, its lowest in over two months, pressured by a rise in U.S. bond yields.

The 1-year U.S. Treasury yield ticked higher to 5.20% in Asia hours after rising 9 basis points on Friday.

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