On Friday, the Indian rupee made significant gains versus the US dollar, reaching a one-month high. The 82 mark was even removed by the currency! That might be the rupee’s greatest week in a month if the gains keep up. Positive Asian peers, a decline in the value of the dollar, and a substantial inflow of foreign capital all support the local currency’s upward movement. Meanwhile, the rupee’s outlook was further improved by a robust advance in local equities.
The rupee was trading at 81.9750 against the US dollar at the time of writing, up 0.75% from the previous print. In intraday trading, the local currency reached a high of at least 81.925. Since February 2nd, this would be its greatest performance. The rupee has gained almost 1.2% this week at the most recent level.
The dollar index fell against a basket of currencies at the same time, following big overnight advances, while US bond rates dropped from their day’s new highs. According to a Reuters report, the number of Americans submitting new applications for unemployment benefits decreased once more last week, indicating continued strength in the labour market and escalating concerns on the financial markets that the Federal Reserve might continue raising interest rates indefinitely.
Moreover, the rupee might be following developments in the NDF markets. Despite a stronger dollar and higher bond yields, NDF ended the day at 82.39 to the dollar on Thursday. The RBI’s participation in the offshore markets, according to Sriram Iyer, Senior Research Analyst at Reliance Securities, “may be one plausible cause for the NDF to strengthen.”
