The rupee recovered most of its losses against the US dollar as exporters sold the US currency after a strong opening to the dollar in domestic trade on Friday.
At 2.55pm the rupee was trading at 61.265 per dollar, down 0.14% from its previous close of 61.18, but more importantly it was off its intra-day low of 61.55 earlier in the day.
The partially convertible currency had opened at 61.415 a dollar as banks bought the US currency after overnight data showed that the US economy was recovering at a quicker-than-expected pace.
Jobless claims dropped by 9,000 to 315,000 in the week ended 8 March, a labour department report showed 13 March. A separate report from the commerce department showed retail sales rose in February for the first time in three months. Purchases climbed 0.3% after a revised 0.6% decrease a month earlier that was bigger than initially estimated.
“The rupee was trading weaker earlier but since then there is no real customer dollar demand in the market which has allowed it to rebound. Exporters are also looking to sell the dollar at every uptick which is why rupee has rebounded,” said Agam Gupta, managing director, fixed income trading, India at Standard Chartered Plc.
A larger-than-expected drop in wholesale inflation also soothed the market. The February wholesale price inflation (WPI) figure dropped to 4.68% from 5.05% in January, much below the consensus estimate of 4.9% and a nine-month low.
Since January this year, the rupee has gained 0.89% amid a return of foreign inflows in both the debt as well as equity markets in India.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 79.596, down 0.03% from the previous close of 79.62.
India’s benchmark Sensex was trading at 21,613.80, down 0.74%, or 160.81 points, from the previous close.
The 10-year bond was trading at 8.771%, from previous close of 8.738%. It opened at 8.738% and touched a high and a low of 8.784% and 8.737%, respectively.
The India call money rate was trading at 8.65%, up 23.57% from previous close of 7%. It opened at 8.05% and touched a high and a low of 8.65% and 8.05%, respectively.
Source:- livemint.com
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