Indian rupee rises 40 paise against US dollar, gets boost from Chinese Yuan

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Indian rupee got off to a rollicking start for the week, appreciating nearly 40 paise, towards 61:50/51 levels on spot. Reuters Indian rupee got off to a rollicking start for the week, appreciating nearly 40 paise, towards 61:50/51 levels on spot. Reuters
SummaryIndian rupee got off to a rollicking start for the week, appreciating nearly 40 paise.

Indian rupee got off to a rollicking start for the week, appreciating nearly 40 paise, towards 61:50/51 levels on spot. Offshore markets led the charge, as FIIs poured money into the domestic debt market. A couple of large sell orders from exporters were triggered as US dollar drifted lower to a month's low. A sizable rally in the domestic equity markets also added fuel to the rupee appreciation.

Globally, US dollar managed to claw back some gains, as Pound sold off. However, that did not have much effect on rupee. At the same time, news that Chinese Yuan touched a fresh life high against US dollar, had a positive rub on rupee.

After trading closed, Indian retail inflation for the month of December was released, which came in much better than consensus, at 9.87% compared with 11.16% in November.  A sharp decline in food inflation, which dipped from 14.72% to 12.16%, pulled the headline inflation lower. December wholesale level inflation is scheduled for release on Wednesday.

Outlook: Over the near-term rupee can trade within a range of 61:00 to 61:80 on spot.

By Anindya Banerjee, currency analyst, Kotak Securities

NOTE: The views expressed are those of the author.

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