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    Rupee opens 13 paise up ahead of RBI policy outcome

    Synopsis

    The expectation of an announcement of the stimulus package from the US kept the dollar under pressure.

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    Market analysts are divided over the possibility of another rate cut by the RBI in its forthcoming policy arguing that one-time loan restructuring was more essential at this juncture to tide over the Covid-19 situation.
    The rupee on Thursday opened 13 paise higher at 74.81 against the US dollar ahead of the central bank's money policy outcome scheduled later in the day and on weakness in the dollar index.

    Market analysts are divided over the possibility of another rate cut by the RBI in its forthcoming policy arguing that one-time loan restructuring was more essential at this juncture to tide over the Covid-19 situation.

    The expectation of an announcement of the stimulus package from the US kept the dollar under pressure.

    “Volatility for major crosses is also expected to remain high ahead of few important economic data which are expected to release in the next couple of sessions. For the day, we expect USDINR (Spot) to quote in the range of 74.50 and 75.10,” brokerage Motilal Oswal Financial Services said.

    Yesterday, the dollar was weighed down against its major crosses after data released from the US showed private employers hired far fewer workers than expected in July as companies exhausted loans to help with wages and new Covid-19 infections flared up across the country.

    From the US, market participants will be keeping an eye on non-farm payrolls number that will be released on Friday. Weaker-than-expected number could continue to keep the greenback under pressure.

    Today, focus will be Bank of England policy statement and expectation is that the central bank could hold rates unchanged but commentary from the governor will be important to trigger further move for the currency.
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