Rupee rebounds against US dollar, approaches 68 level: 5 things to know
Rupee today opened lower but later recovered to hit multi-week highs Morgan Stanley is bullish on emerging market currencies, including rupee
The rupee (INR) today strengthened against the US dollar (USD) today, hitting 69.07 against the US dollar. The rupee today opened at 69.26 as compared to Wednesday’s close of 69.15, tracking higher global oil prices. At day’s low the rupee had hit 69.31 against US dollar. An easing of global oil prices and gains in domestic equities markets boosted the rupee. In afternoon trade, the Sensex was up around 100 points amid higher Asian equities. Foreign institutional investors (FIIs) remained net buyers in the capital markets, putting in ₹106.26 crore on Wednesday, as per provisional data.
Here are 5 things to know about today’s INR-USD trade
1) Global risk sentiment was boosted after the South China Morning Post (SCMP), citing sources, said Washington and Beijing were laying out an agreement that would help avert the next round of tariffs on an additional $300 billion of Chinese imports. US President Donald Trump is expected to meet with Chinese President Xi Jinping on Saturday in Japan.
2) Earlier this month, the dollar index hit a three-month low as US Federal Reserve hinted at possible rate cut at its next meet. But today the dollar rebounded against other currencies after top Fed officials pushed back against market expectations that the U.S. central bank will cut rates by half a percentage point next month.
3) Global financial services major Morgan Stanley is bullish on emerging market currencies, betting on further rise in Indian rupee. “Emerging-market currencies have lagged, but with growing conviction that the dollar has turned, we think that a catch-up is under way," it said in a note.
4) Investors will await data from RBI which will release the June Financial Stability report and January-March current account deficit this week, Reliance Securities said in a note.
5) Meanwhile, the RBI on Wednesday issued new guidelines on rupee interest rate derivatives. Exchanges have been provided with the flexibility to design and structure standardised products based on market requirements. "Given the evolution of the market, there is now a need to permit flexibility for exchanges and market-makers in the design and innovation of products while ensuring that relatively less informed participants using these derivatives markets are adequately protected," the RBI said while issuing the directions.
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