Rupee to hover around 83-83.30 against Dollar range during budget week

The Rupee is anticipated to experience a calm start on Monday as traders keep a close watch on the Federal Reserve's monetary policy decision and India's federal budget announcement later in the week.

Non-deliverable forwards suggest that the Rupee will open either flat or slightly weaker against the US dollar, compared to its previous session at 83.1150.

With the Fed's policy decision scheduled for Wednesday and budget presentation the following day, experts doubt that either event will significantly impact volatility. 

Traders expect the Rupee to maintain a range of 83-83.30 against the dollar, according to an FX trader at a bank. This range is narrower compared to the broader 82.80 to 83.40 range.

It is widely expected that the Fed will maintain its policy rate as it awaits further evidence regarding inflation reaching its medium-term target. HSBC Bank noted that the upcoming meeting should be straightforward, with Fed Chair Jerome Powell already signalling a pivot at the previous meeting. 

There will be no new economic or rate forecasts released, but the focus will be on Powell's perspective regarding potential changes to the Fed's balance sheet and the pace of quantitative tightening.

Investors are divided on whether the Fed will cut rates at the March meeting or delay the decision, with the monthly US jobs report due on Friday playing a crucial role in shaping expectations.

Regarding budget, the FX trader mentioned that its impact on the Rupee will be mostly felt through equity movements. 

Meanwhile, Asian currencies remained mostly range-bound following the release of the US core personal consumption expenditures price index, which rose 0.2 per cent in December, meeting expectations.

(With Reuters Inputs)