The rupee fell 23 paise to 66.87 against the US dollar in early trade on Monday, in line with weakness in other Asian currencies, after data suggested the US economy strengthened in the December quarter, more than what was previously thought.
The GDP growth for US economy has been revised upward to 1.4 per cent in the December quarter from 1 per cent estimated earlier.
“The dollar may outperform other global currencies in the next two weeks,” said Jeremy Cook of World First in an interview with ET Now. The expert, however, believes US jobs data may not drive the US Fed to hike the policy rate.
The domestic currency had closed last week at 66.64 to a dollar.
Most Asian currencies retreated. The Indonesian rupiah fell 0.45 per cent, the Japanese yen slipped 0.33 per cent while the Korean won declined 0.21 per cent against the greenback.
The Philipine peso, the Thai baht and the Chinese yuan fell between 0.06 per cent and 0.15 per cent. The Taiwanese dollar and the Malaysian ringgit, meanwhile, gained 0.20 per cent and 0.10 per cent, respectively.
The dollar index, which tracks the movement of dollar against a basket of six major world currencies, rose 0.12 per cent to 96.38.
The near-term trigger for the rupee will be the forthcoming RBI review on April 5.
“Inflation is down. The rupee has been seeing some appreciation. The US Fed has put a pause on rate hikes and, thus, the external scenario seems to be providing some comfort. Crude has been hardening somewhat but it is comfortably below what is our comfort zone at $40. So the macroeconomic environment is conducive toward softening of rates. The market is pretty much factoring in a 25 bps rate cut,” said Killol Pandya, Head-Fixed Income, Peerless Mutual Fund.