The Indian rupee rose against the U.S. dollar on the eve of a widely-anticipated Federal Reserve rate hike. The rupee was trading at 65.69 per dollar, the highest level in 16 months.
The Indian rupee continued its stellar run against the United States dollar to finish at a fresh 16-month high of 65.69 on Wednesday as exporters destructively offloaded the US currency ahead of the Federal reserve meeting outcome.
The Rupee closed at 65.69—a level last seen on 4 November 2016, up 0.19% from its previous close of 65.82. The rupee opened at 65.76 a dollar and touched a high of 65.42, a level is last seen on 2 November 2015.
In this year, the Indian rupees strengthen for the third session to hit the best performing currency in Asia after South Korean won and Taiwanese dollar. It gained nearly 3.4% in this period.
The Fed is likely to raise interest rates during a two-day meeting, and traders are looking for clues on how quickly the United States central bank is planning to tighten monetary policy.
The benchmark Sensex index fell 0.15% or 44.52 points to closed at 29,398.11. So far this year, it has risen 11%.
Wholesale price inflation enhanced to an over three-year high at 6.55% in February from 5.25% a month ago, while retail inflation accelerated for the first time in six months to 3.65% in February from 3.17%.
Core Consumer price index eased by 20 basis points to 4.8% with significant fields such as education, health, and housing registering slower step of increase.
“We expect consumer price index to grow further in the 4-4.25% range on low base effect but the rise is expected to be very kind. While the prices of vegetables are likely to normalise after a steep fall, pulses prices should decrease further. Also, the recent reduction in the prices of crude oil strengthening rupee portend well for inflation outlook,” said Edelweiss Securities in a note.
The 10-year bond yield closed at 6.829% when compared to its Tuesday’s close of 6.903%. Bond yields and prices move are contradictory.
Foreign institutional investors (FIIs) have bought $2.90 billion and $627.30 million from local equity and debt markets, respectively.
The currencies of Asians were trading higher. South Korean won 0.46%, Taiwan dollar was up 0.53%, Singapore dollar 0.21%, Thai baht 0.21%, China offshore 0.09%, China renminbi 0.05%, Japanese yen 0.05% and Malaysian ringgit 0.04%.
The dollar, which measures the UnitedStates currency’s strength against major currencies, was trading at 101.5, down 0.2% from its Monday’s close of 101.7.