India Rupee Stays Higher Tracking Peers; Dollar Sliped

India Rupee Stays Higher Tracking Peers; Dollar Sliped

04 Dec 2020 03:57 PM

The Indian rupee stayed higher against the U.S. currency tracking an uptick in regional peers amid a broad decline in the dollar index.

The rupee was quoted at 73.76 compared with 73.90 in the previous session. In early trades, the rupee had risen to an intraday high of 73.71.

The South Korean won led Asian currencies higher, climbing almost a percent. Most other currencies were up at least 0.2%, tracking the dollar index’s decline to its lowest levels since April 2018. The dollar index extended losses, falling to below 90.70 ahead of the U.S. monthly jobs report. Economists polled by Reuters expect jobs addition by U.S. employers in November to drop to 469,000 from 638,000 in the prior month.

The monthly report will help traders assess the extent to which hiring was impacted by the new containment measures put in place in light of the surging coronavirus infections. Analysts expect U.S. GDP growth in the current and the next quarter to be negatively affected on account of the ramp-up in restrictions.

Futures on the S&P 500 Index were marginally higher, while region equities were mixed.

India’s BSE Sensex was up 0.3% after hitting a fresh high today. The Monetary Policy Committee today held the key interest rate steady at 4% and it will continue with the accommodative stance at least into the next fiscal year.

The RBI didn’t have a target for the rupee exchange rate and it would be difficult to say whether the rupee is overvalued or undervalued. The Indian rupee has underperformed most Asian currencies this year and is down 3.3% so far in 2020, compared with a 5.8% and 4.8% rally in the Chinese yuan and the Korean won respectively.