Mumbai: The Indian rupee on Friday closed at 17-week high against the US dollar ahead of the final results of the assembly elections, which will be declared on Saturday and key macro economic data next week.
Gains in the currency was due to continued buying from foreign investors in the local equity and debt markets. Between, 2-8 March, FII’s bought $1.3 billion in equity while $150 million in debt.
Indian markets will be closed on Monday on occasion of Holi.
The home currency closed at 66.61—a level last seen on 9 November, up 0.20% from its Thursday’s close of 66.72. The rupee opened at 66.73 a dollar and touched a high and a low of 66.56 and 66.73 respectively.
The exit polls shows that the Bharatiya Janata Party (BJP) is likely to emerge as a major victor from the latest state assembly elections except in Punjab. While some polls shows that the BJP is likely to get full majority in Uttar Pradesh.
The government will issue the index of industrial production (IIP) data for January on Friday and consumer price inflation data for February on Monday. Wholesale price inflation (WPI) data for February will be released on Tuesday.
According to Bloomberg analyst polls, IIP will be at 0.5% for January against -0.4% previous month while CPI will be at 3.6% for February versus 3.17% a month ago. WPI will be at 6.1% for February from 5.25% in January.
The benchmark Sensex index rose 0.06% or 17.10 points to closed at 28,946.23. So far this year, it has risen 8.3%.
The 10-year bond yield closed at 6.904% compared to its Thursday’s close of 6.861%. Bond yields and prices move in opposite directions.
So far this year, rupee gained 2% while foreign institutional investors have bought $2.85 billion and $576.70 million from local equity and debt markets, respectively.
Asian currencies were trading mixed as investors shifted their focus from the European Central Bank to the monthly US employment report due later on Friday for a fresh read on the path of US monetary policy. The next US Federal Reserve meeting will be on 14-15 March.
Philippines peso was up 0.12%, Singapore dollar 0.11%, Malaysian ringgit 0.09%, Indonesian rupiah 0.09%. However, Japanese yen was down 0.42%, Taiwan dollar 0.09%, China Renminbi 0.07%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 101.84, down 0.01% from its Monday’s close of 101.85.
Earlier, European Commercial Bank president Mario Draghi gave a more positive outlook for the region’s economy that stopped short of signalling the central bank is contemplating a shift to a more hawkish stance, according to a Bloomberg report.