Rupee rises on inflows, oil companies' dollar buys cap gain
rupee ended stronger on Wednesday, aided by equity-related inflows even as sustained dollar demand from local oil companies ate into some of its gains.
The rupee ended at 83.3250 against the U.S. dollar, stronger than its close at 83.3825 in the previous session.
Inflows helped the rupee climb to an intraday high of 83.30 but «at lower levels (on USD/INR), dollar demand continues to emerge,» Dilip Parmar, a foreign exchange research analyst at HDFC Securities, said.
Oil companies were seen bidding for dollars through the session on Wednesday while other importers also bought the greenback when the rupee ticked up to 83.30-83.31, a foreign exchange trader at a foreign bank said.
The dollar index was steady at 103.96 while most Asian currencies were rangebound.
The 10-year U.S.
Treasury yield inched up to 4.19% but had fallen about 8 basis points overnight after data showed U.S. job openings hit their lowest in over two and a half years in October.
«The dollar has remained rather supported across the board… We suspect markets are holding a more cautious stance as we head into the key US payroll figures on Friday and the Fed meeting next week,» ING Bank said in a note.
While investors have raised bets that the Federal Reserve could starting cutting policy rates as soon as March next year, the overnight index swap market is signalling that India's central bank will not rush to ease rates.
The Reserve Bank of India (RBI) will deliver its policy decision on Friday and is widely expected to keep policy rates unchanged.
The RBI conducted a dollar-rupee buy/sell swap for about $600 million-$800 million on Tuesday, likely aimed at neutralising the liquidity impact of its spot dollar sales and to absorb inflows, traders
