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Mumbai: The Indian rupee on Friday weakened marginally against the US dollar ahead of the key macro economic data due next week. Traders are also cautious before next week’s Federal Reserve policy meeting.
The rupee closed at 64.25, down 0.07% from its Thursday’s close of 64.21. The rupee opened at 64.28 a dollar and touched a high and a low of 64.17 and 64.34, respectively.
The government will issue Index of Industrial Production (IIP) and Consumer Price Index (CPI) inflation data for April and May, respectively, on Monday. According to Bloomberg estimates, CPI will be at 2.5% for May from 2.99% a month ago. IIP will be at 2.8% for April from 2.7% in March.
Bond yield fell to four month low after the Reserve Bank of India on Wednesday cut inflation target sharply which boosted the sentiment of a rate cut.
The 10-year bond yield closed at 6.503% compared to its previous close of 6.532%. Bond yields and prices move in opposite directions.
On Wednesday, the Reserve Bank of India (RBI) kept key rates unchanged but cut its inflation forecast sharply. For the first half of fiscal year 2017-18 (April-September), CPI is now seen at 2.0-3.5% and for the second half at 3.5-4.5%. This marks a revision from 4.5% and 5.0% estimated earlier, respectively.
The benchmark Sensex index rose 0.16% or 48.70 points to closed at 31,262.06. Year-to-date, it has gained 17.2%.
So far this year, the rupee has gained 5.7%, while foreign investors bought $7.35 billion and $11.82 billion in local equity and debt markets, respectively.
Asian currencies were trading lower. Japanese yen was down 0.33%, China Offshore spot 0.13%, Singapore dollar 0.12%, Taiwan dollar 0.11%, South Korean won 0.1%. However, Malaysian ringgit was up 0.07%, Thai Baht 0.06%, Indonesian rupiah 0.05%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 97.388, up 0.50% from its previous close of 96.918.
Most attention on Friday was focused on the U.K. election, with the pound slumping after Prime Minister Theresa May’s Conservative Party lost its majority.
Bloomberg contributed this story