The Indian rupee climbed for the second consecutive session against the dollar, with traders' focus on high near-term forward premiums.
The rupee was traded at 73.85 compared with 73.92 in the previous session.
The rupee, in early trades, was aided by higher cash swap rates that encouraged carry trades and prompted traders to trim their dollar long positions. The one-year-forward premium jumped to 4.01 rupees today, the highest since August 2016, while the implied yield jumped to 5.42%, the highest since October 2016.
The rupee trimmed gains amid a rebound in the dollar index. The dollar index was up 0.4% at 91.34, after dropping 0.4% yesterday amid a miss on the ISM manufacturing data.
Several states have imposed restrictions to curb the spread of the virus. The federal government had said it was not considering a nationwide lockdown on fears it may hobble economic activity and restrict growth.
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