Mumbai: The Indian rupee strengthened against the US dollar for the third session on Wednesday and closed at an 11-week high on the hopes of a trade deal between the US and China.
The rupee ended at 69.16 a dollar -- a level last seen on 11 April, up 0.28% from its previous close of 69.35. The Indian currency had opened at 69.41 a dollar and touched a high of 69.09.
The US is willing to suspend the next round of tariffs on an additional $300 billion of Chinese imports while Beijing and Washington prepare to resume trade negotiations. The decision, which is still under consideration, may be announced after a meeting between US President Donald Trump and his Chinese counterpart Xi Jinping set for Saturday at the Group of 20 summit in Japan.
Earlier rating agency Fitch had said if the US imposes 25% tariff on the remaining $300 billion of imports from China it would reduce world economic output by 40 basis points in 2020.
Traders also await the Union budget which will be presented on 5 July and the government’s steps to revive growth.
Government bond yields rose as crude oil prices continued to rise. The 10-year bond yield was at 6.933%, compared with Tuesday's close of 6.88%.
The benchmark equity index Sensex ended 0.4% higher at 39592.08 points. Year to date, the index has risen 9.33%.
So far this year, the rupee has risen 0.9% against the greenback. During the period, foreign investors bought $11.04 billion in Indian equities and $1.45 billion in the debt market.