Indian rupee open 10 paise down at 87.36/USD ahead of Powell speech at Jackson Hole

Indian rupee

Indian rupee opened 10 paise down on August 22 as traders awaited a speech from Federal Reserve Chair Jerome Powell at the annual Jackson Hole symposium.

The local currency opened at 87.3652 against the US dollar, as compared to 87.2612 against the greenback at previous close.

"All eyes now turn to Fed Chair Jerome Powell’s speech at Jackson Hole, which will likely set the near-term course for the dollar—and by extension, the rupee," said Amit Pabari, managing director at CR Forex Advisors.

Currency market is looking out for Powell to provide clues about the likelihood of a September rate cut in the wake of recent signs of job market weakness and the near term outlook for policy.

Ahead of the speech, dollar index has firmed up to 98.677 in the morning trade, as compared to 98.619 at the previous close.

An unexpectedly weak July jobs report coupled with big downward revisions to hiring in May and June bolstered hopes of an imminent reduction in borrowing costs, with traders even pricing in a jumbo rate cut for the next meeting in September.

But since then cautious comments from other policymakers and economic data flashing inflationary risks have tempered those expectations. Still, traders are pricing in a 75% chance of a 25-basis-point rate cut in September, down from 92% a week earlier, CME FedWatch tool showed.