Mumbai: The rupee opened marginally lower against the US dollar on Friday, with traders exercising caution ahead of the release of data on retail inflation and factory output due later today.

Having opened at 68.42 a dollar, the Indian currency, in early deals, was traded at 68.49 a dollar, down from its previous close of 68.45.

Yield on the 10-year government bond was at 6.528% compared with Thursday's close of 6.493%, as bond traders also await data on retail inflation for clues to the Reserve Bank of India’s next move. According to estimates of analysts surveyed by Bloomberg, consumer price inflation for June likely edged up to 3.13% from 3.05% a month ago. Index of industrial production likely rose to 2.85% in May from 3.4% in April.

In pre-trade, the benchmark Sensex was up 0.22% at 38908.27 points. So far this year, the index has risen 7.64%.

The rupee has risen 1.9% against the greenback in the year so far, while foreign investors bought $10.73 billion in Indian equities and $2.31 billion in the debt market during the period.

Other Asian currencies traded higher as the dollar weakened as a stronger-than-expected US inflation data failed to douse speculation that the Federal Reserve will lower interest rates this month.

Traders focused on Fed Chairman Jerome Powell’s testimony to Congress on Thursday, where he indicated there was room to cut rates as the tie between the inflation and jobless rates has broken down.

US consumer prices rose more than forecast in June, underscoring the strength of the economy after a jobs report last week topped forecasts.

The Thai Baht was up 0.26%, Philippines peso 0.15%, Japanese yen 0.13%, Malaysian ringgit 0.08%. However, South Korean won was down 0.28%, Indonesian rupiah 0.12%.

The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 96.946, down 0.11% from its previous close of 97.05

(Bloomberg contributed to this story)

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