A trading session affected by an outage on the London Stock Exchange Group’s (LSEG) foreign exchange trading platform saw the Indian rupee gain ground on Thursday, helped by dollar sales from foreign banks and reduced short bets against it.
The rupee gained 0.2% on the day and ended at 86.9975 versus the US dollar. The currency fell by 0.1% every week.
Although consumer prices increased less than anticipated in February, according to data released on Wednesday, the dollar index was little changed at 103.6 due to an increase in U.S. bond rates, which suggests a greater likelihood of rate reduction by the Federal Reserve.
The rupee benefited from the dollar sales from foreign banks and the short positions that dealers trimmed, according to traders. In the short term, the local currency “may move towards 86.50 if dollar weakness continues, but the increase would be delayed as strong importers would be active below 87,
With risks pointing upward in the upcoming weeks, the bank anticipates that the dollar will stabilize in the near future. With the 1-year indicated yield down 3 basis points at 2.13% on Thursday, dollar-rupee forward premiums also fell as a result of an increase in near-tenor U.S. Treasury yields.
Investors are now waiting for the wholesale U.S. inflation data that is expected to be released later today. Friday is a local holiday hence, the Indian financial markets are closed.
