The partially convertible rupee was trading at 73.48/49 per dollar at 0612 GMT after touching 73.39 earlier, its strongest since June 16. The currency had closed at 73.68 on Friday.
The Indian rupee rose to its strongest in two-and-a-half months on Monday, after the U.S. Federal Reserve chairman’s comments sparked bets of a slower reduction in monetary stimulus.
The partially convertible rupee was trading at 73.48/49 per dollar at 0612 GMT after touching 73.39 earlier, its strongest since June 16. The currency had closed at 73.68 on Friday.
The dollar loitered around multi-week lows in the wake of Fed Chair Jerome Powell laying out a slower-than-expected path to rate hikes, as traders’ focus shifted to U.S. jobs figures due on Friday for clues on a tapering timeline.
”Powell re-emphasised that the pace of the asset purchase programme could slow by the end of the year. However, he refrained from providing an exact timeline. A turn in the interest rate cycle remains far,” HDFC Bank economists said in a note.
”We expect further near-term downside in the dollar, though an upbeat job report could cap losses,” they added predicting a range of 73.40 to 74 for the USD/INR for the week.
Most emerging market currencies were firm tracking weakness in the dollar.
The benchmark 10-year bond yield eased slightly to 6.24% compared to its close of 6.25%.
On Friday the government raised a higher-than-planned 340 billion rupees at a debt auction with the central bank setting lower-than-expected cut-off yields.
On the domestic front, traders will now focus on the June quarter GDP data that is due to be released on Tuesday for clues on the economic revival and to gauge a possible timeline on the RBI’s policy normalisation.
However, Governor Shaktikanta Das told a local news channel last week that the central bank will not surprise the market with any sudden measures and that all measures will be cautious and well calibrated.
(With Reuters inputs)
