Indian rupee seen lower at open on yuan-led losses on Asian currencies

MUMBAI: Due to Chinese demonstrations against COVID limitations, demand for Asian currencies and stocks is projected to be lower on Monday, which would result in a worse opening for the Indian rupee against the US dollar.

Early trading is expected to see the rupee trading at approximately 81.85 against the US dollar, down from 81.6850 the previous day.

Following infrequent demonstrations against China's rigorous zero-COVID policy in key Chinese cities, the offshore yuan fell 0.6% to 7.24 to the dollar.

The rupee might find "good" support at around the 81.90 levels after opening weaker, according to a trader at a Mumbai-based bank.

The trader noted that the pair (USD/INR) had seen offers three times last week at the 81.85-81.90 levels.

In addition, the dealer said that the oil prices should support the rupee. Brent crude prices dropped more than 2%, reaching their lowest point since January at about $82 per barrel.

Oil prices have fallen by almost 14% this month, the most since March of last year, due to worries about China's consumption.

Along with the currency, Chinese stock prices and US market futures fell.

Early on Sunday, protests simmered in Shanghai as citizens in numerous Chinese cities rebelled against COVID-19 limitations.

The nation's central bank announced on Friday that it would reduce the reserve requirement ratio for banks by 25 basis points in order to boost the economy.

Demand for safe-haven assets boosted the dollar relative to its key competitors.

To 106.40, the dollar index increased. Bond yields decreased.

Gains in the Indian rupee coincident with Asian FX encounter resistance at 81.50/USD.