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Market snapshot
The 1-month non-deliverable forward (NDF) suggests the Indian rupee will open in the 88.60–88.62 range versus the US dollar. The onshore rupee had settled at 88.6550 on Tuesday, so the NDF implies a marginally firmer start to the session.
What the NDF is telling traders
An NDF quotes market expectations for the currency’s near-term direction outside domestic trading hours. In this case, the slight gap between the NDF range and Tuesday’s close indicates traders are pricing in modest demand for the rupee against the dollar at the open.
Why this matters
- Importers and exporters: Even small swings in the rupee affect costs and margins for businesses that deal in dollars.
- Foreign flows: Portfolio moves by foreign investors can quickly influence the currency, and the NDF reflects those offshore views.
- Market sentiment: A firmer opening can ease pressure on bond yields and short-term funding costs, while a weaker start can add volatility.
Factors to watch today
- Global dollar moves: Strength or weakness in the US dollar will be a key driver.
- Domestic flows: Inflows or outflows from foreign investors and corporate dollar demand can sway the spot rate.
- Oil and commodity prices: Higher import bills typically weigh on the rupee.
In short, the 1-month NDF points to a slightly firmer rupee at the open. Traders and businesses will be watching global cues and domestic flows to see whether the early move holds through the trading day.