Rupee closes at four-month high against US dollar
Mumbai: The Indian rupee on Tuesday closed at four-month high against the US dollar ahead of the key events in domestic as well as international markets due later this week.
Gains in the rupee was also due to continued buying from foreign institutional investors (FIIs) in both local equity and bond markets. So far this year, FIIs have bought $1.76 billion and $430.60 million from local equity and debt markets, respectively.
The home currency closed at 66.67—a level last seen on 10 November, up 0.06% from its previous close of 66.72. The local currency opened at 66.67 a dollar and touched a high of 66.59—a level last seen on 10 November. Year to date, the rupee has gained 1.8%.
Investors are focusing on results of the upcoming state elections on 11 March. The markets are also gearing up for an interest rate hike by the US Federal Reserve in its two-day meeting on 14-15 March.
The benchmark Sensex index fell 0.17% or 48.63 points to closed at 28,999.56. So far this year, it has risen 9.1%.
The 10-year bond yield closed at 6.834% compared to its Monday ’s close of 6.878%. Bond yields and prices move in opposite directions.
Asian currencies were trading stronger. South Korean won was up 1.01%, Taiwan dollar 0.3%, Singapore dollar 0.14%, China offshore 0.09%, Japanese yen and Indonesian rupiah were up 0.04% each.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 101.61, down 0.03% from its Monday’s close of 101.64.
Traders are cautious ahead of the European Central Bank (ECB) meeting and US employment data on Thursday and Friday, respectively.
ECB chief Mario Draghi is expected to keep quantitative easing, or QE, going until the end of the year while jobs data likely to come at 190,000 for February, according to a Bloomberg forecast report.