Mumbai, India (BBN)-The rupee recovered all its loses against the dollar to trade marginally higher as exporters sold the US currency noting the attractive levels of the greenback.
At 2.50pm, the home currency was trading at 63.94, up 0.06% from its previous close of 63.98 after recovering from a intra-day low of 64.16 per dollar, reports the Live Mint.
It had opened at 64.09 per dollar earlier on Wednesday as dealers had bought dollars noting its strength against Asian currencies and also expecting outflows from foreign institutional investors (FIIs) because of the weak local stock market.
“The last rally for the dollar stopped at around 64.20, so exporters with dollars to sell this month see these as good levels to sell and that has supported the rupee,” said a dealer with a US bank, he expects the rupee to be at a weakening bias as higher rates in the US and a likely cut by the Reserve Bank of India (RBI) here will likely lead to some dollar outflows from India.
Traders are awaiting two key data points in India. The local gross domestic product data due is on 29 May and Reserve Bank of India’s (RBI’s) bi-monthly policy preview will be out on 2 June. According to Bloomberg estimates, GDP will be at 7.1% in March quarter as against 7.5% in December quarter.
Data from the US is also pointing to a interest rate hike there sooner rather than later.
Better-than-expected readings on US capital-equipment orders, new home sales and regional manufacturing data on Tuesday have fuelled expectations that a US rate hike could come sooner than expected.
The local benchmark index Sensex was little changed at 27,543.96 points.
The yield on India’s 10-year benchmark bond was trading at 7.67%, little changed from Tuesday.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 97.025, down 0.28% from its previous close of 97.299.