Rupee opens marginally lower against US dollar
At 9.05am, the rupee was trading at 70.74 a dollar, down 0.31% from its Tuesday’s close of 70.51
The Indian rupee weakened marginally against the US dollar, tracking losses in its Asian peers and ahead of the Reserve Bank of India’s policy decision today after 2.30pm. At 9.05am, the rupee was trading at 70.74 a dollar, down 0.31% from its Tuesday’s close of 70.51. The currency opened at 70.67 a dollar. The 10-year government bond yield stood at 7.558% from its previous close of 7.573%. Bond yields and prices move in opposite directions. Analysts believe that the RBI decision may be a non-event on the key rate front, but the focus will be on RBI’s communication and stance.
“We expect the December 2018 MPC to vote for a unanimous hold with a “calibrated tightening” stance. Continued low food inflation, sharp fall in oil prices and a lower than expected growth trajectory could prompt the central bank to be on a long pause. However, we expect that resurfacing of risks in H1FY2020 (especially in the food group) could lead the MPC to keep the stance unchanged”, said ICICI Bank Global Markets in a 4 December note.
The benchmark Sensex Index rose 0.18% or 64.24 points to 36,198.55 points. Year to date, it has rose 6.41%.
So far this year, the rupee has declined 9.41%, while foreign investors have sold $4.87 billion and $7.79 billion in the equity and debt markets, respectively.
Asian currencies were trading lower as skepticism Washington and Beijing will reach a trade deal and concern over American economic growth spurred risk aversion and pushed down U.S. stocks.
South Korean won was down 0.84%, Indonesian rupiah 0.65%, Philippines peso 0.45%, China renminbi 0.41%, Taiwan dollar 0.34%, Malaysian ringgit 0.25%, China Offshore 0.23%, Singapore dollar 0.21%, Japanese yen 0.20%, Thai Baht 0.07%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 97.122, up 0.16% from its previous close of 96.965.
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