The Indian rupee is expected to open largely unchanged around 83.40 on Monday, despite the drop in U.S. Treasury yields and the dollar after the monthly U.S. jobs report. The USD/INR pair is likely to see rangebound movement, with a possible range between 83.34 to 83.46.

 The Indian rupee is expected to stay in a rangebound mode this week and most likely to track its Asian counterparts. Markets will closely watch the U.S Treasury yields after U.S. economic data raised expectations of Federal Reserve rate cuts.

Despite closing marginally higher at 83.4225 on Friday, the rupee experienced a slight weekly loss compared to most Asian currencies that saw gains.

The recent U.S. non-farm payrolls report, which showed lower job additions than anticipated, led to a weaker dollar and a dip in U.S. bond yields. Investors are now betting on the Fed cutting rates twice this year, with 48 basis points of easing priced in.

This week’s economic calendar is relatively quiet, so we can expect USD/INR to trade within a range of 83.25 to 83.50 for the week.

 In April, the Indian rupee concluded on a stable note, almost unchanged at 83.40 compared to 83.35 in the previous month. The rupee experienced a depreciation trend primarily due to heightened demand for dollars from importers.

Additionally, persistent weakness in other major Asian currencies exerted continuous pressure on the rupee’s value.

The landscape was further influenced by global market dynamics, notably the higher for longer rates in the U.S., which prompted foreign investors to withdraw $1.57 billion from Indian stocks and bonds after substantial buying in February and March.

Meanwhile, the Federal Reserve opted to maintain interest rates unchanged during its April 30 – May 1 meeting, signaling a leaning towards future rate cuts while expressing concerns about persistent inflation.

Fed Chair Powell’s remarks hinted at a potential prolonged period of maintaining the current benchmark rate range of 5.25%-5.50%, citing challenges in achieving the desired inflation decline towards 2%.

The Dollar Index recorded a robust gain of over 1.5% in April, marking its highest monthly rise since January, aligned with the rise in U.S. Treasury notes. Market focus now shifts to the U.S. April Inflation print on May 15 and market cues from the domestic equity and bond markets.

Technical bias continues to signal a broad range move in the USD/INR pair, with expectations ranging between 83.00 to 83.60 in the month of May.