The Indian rupee recorded its best week against the dollar in five months, helped by a slew of foreign dollar inflows and exporters’ dollar sales.
The rupee jumped to 73.01 today against 72.83 in the previous session, as the dollar index extended yesterday's bounce amid the weak risk appetite in the region. For the week, the local unit advanced 0.6%, its biggest weekly rise since the week ended Oct. 2. The rupee traded in a broad 72.58 to 73.78 range this week.
The 10-year Treasury yield climbed to 1.58% today as Federal Reserve Chairman Jerome Powell yesterday did not signal any potential action to address the recent rise in yields.
Another potential risk factor for the rupee could be higher crude oil prices. The Brent crude contract was up 3.4% this week, on course to book its seventh consecutive weekly rise, and was trading at 14-month highs after OPEC and allies surprisingly maintained the current output cuts.
India’s trade deficit was at $12.88 billion in February, wider than $10.16 billion a year earlier, preliminary data showed. India’s benchmark BSE Sensex was up 2.8% this week, snapping two weeks of losses.
The one-year forward premium was at 3.58 rupees against 3.53 rupees in the previous session.
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