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Rupee Gains On Decline In US Yields But Behind Asian Peers’ Advance

Global Equities
Source- The Motley Fool

Following a decline in US Treasury yields and a retreat in the dollar due to speculation that the US Federal Reserve has most likely finished raising interest rates this cycle, the Indian rupee appreciated on Monday.

Decrease In Treasury Yield

As of 10:40 a.m. IST, the rupee was trading at 83.1850 against the US dollar, up from its closing of 83.2850 during the previous session.

The Malaysian ringgit and Korean won led the strong increase in Asian currencies, although dealers noted that the rupee lagged behind due to importers’ continued need for US dollars.

Treasury yields in the United States decreased after data from Friday suggested that the labor economy was slowing. In Asia, the 10-year U.S. Treasury yield stood at 4.57%.

The likelihood of a rate hike by the Fed at the December meeting has decreased from 20% to just 7%, as per.

Hope For Rupee

“Slightly positive for rupee,” is how HDFC Securities foreign exchange research analyst Dilip Parmar described the happenings. However, Parmar noted that outflows of foreign funds are probably going to put pressure on the local unit and maintain the current range.

Rupee

Source- MARCA

For more than a month, the rupee has been stuck in a range between 83.0225 and 83.2950. Since September, foreign investors have sold $5.1 billion worth of Indian equity, amounting to a net selling position.

“It (USD/INR) will drop to 82.80 if it doesn’t break the range on the higher side in the next two weeks,” a foreign exchange trader at a foreign bank predicted.

Although there isn’t a lot of economic data this week, investors will be watching with bated breath for the remarks made by Fed officials who are scheduled to speak at various forums.

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