Mumbai: The Indian rupee on Tuesday hit a four-month high against the US dollar ahead of the key events in domestic as well as international markets due later this week.
Gains in the rupee was also due to continued buying from foreign institutional investors (FIIs) in both local equity and bond markets. So far this year, FIIs have bought $1.76 billion and $430.60 million from local equity and debt markets, respectively.
The local currency opened at 66.67 a dollar and touched a high of 66.61—a level last seen on 10 November. At 9.54am, the home currency was trading at 66.61—up 0.14% from its Monday’s close of 66.72. Year to date, the rupee has gained 1.9%.
Investors are focusing on results of the upcoming state elections on 11 March. The markets are also gearing up for an interest rate hike by the US Federal Reserve in its two-day meeting on 14-15 March.
The benchmark Sensex index fell 0.01% or 1.02 points to 29,047.17. So far this year, it has risen 9.4%.
The 10-year bond yield was at 6.865% compared to its Monday ’s close of 6.878%. Bond yields and prices move in opposite directions.
Asian currencies were trading stronger. South Korean won was up 0.53%, Taiwan dollar 0.18%, Singapore dollar 0.05%, Indonesian rupiah 0.04%.
However, Malaysian ringgit was down 0.11%, China renminbi 0.1%, Japanese yen 0.07%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 101.66—up 0.01% from its Monday’s close of 101.64.
Traders are cautious ahead of the European Central Bank (ECB) meeting and US employment data on Thursday and Friday, respectively.
ECB chief Mario Draghi is expected to keep quantitative easing, or QE, going until the end of the year while jobs data likely to come at 190,000 for February, according to a Bloomberg forecast report.
