(Photo: Reuters)
(Photo: Reuters)

Rupee, bond prices gain as dollar falls after US Fed holds rates steady

  • The Indian 10-year bond yield was at 6.792%, compared with Wednesday's close of 6.841%
  • In the domestic markets, traders await minutes of the Reserve Bank of India’s latest Monetary Policy Committee meeting

Mumbai: The Indian rupee and bond prices gained on Thursday after the dollar declined against all its major peers after the Federal Reserve held interest rates steady and said it was open to cutting rates by the end of the year.

The rupee ended at 69.44 a dollar, up 0.38% from its previous close of 69.70. The Indian currency opened at 69.50 a dollar.

Overnight, the Fed signaled it was ready to lower rates for the first time since 2008, citing “uncertainties" that have increased the case for a cut as officials seek to prolong the near-record U.S. economic expansion

The Indian 10-year bond yield was at 6.792%, compared with Wednesday's close of 6.841%. The 10-year US Treasury yields slid as much as 5 bps to 1.97%, while 30-year yields dropped as much as 6 bps to 2.48%. Bond prices and yield trade in opposite direction.

In the domestic markets, traders await minutes of the Reserve Bank of India’s latest Monetary Policy Committee meeting, to be released later on Thursday.

The benchmark Sensex index was up 1.25% at 39,601.63 points. Year to date, the index has risen 8.44%.

So far this year, the rupee has risen 0.12% against the US greenback. During the period, foreign investors bought $11.20 billion in Indian equities and $1.18 billion in the debt market.

Asian currencies were trading higher. South Korean won was up 0.81%, Taiwan dollar rose 0.75%, Japanese yen gained 0.43%, and Malaysian ringgit rose 0.41%. Thai Baht rose 0.36%, China renminbi gained 0.35%, Philippines peso was increased 0.26%, Singapore dollar rose 0.25%, Indonesian rupiah gained 0.19%.

The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 96.876, down 0.25% from its previous close of 97.117.

(Bloomberg contributed to this story)

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