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Rupee strengthens against US dollar on Fed rate signal

LiveMint logoLiveMint 25-05-2017 Ravindra N. Sonavane

Mumbai: The Indian rupee on Thursday strengthened against the US dollar tracking gains in the Asian currencies markets after US Federal Reserve minutes signalled a moderate pace in rate hikes.

The rupee opened at 64.56 a dollar. At 9.15am, the rupee was trading at 64.51, up 0.34% from its Wednesday’s close of 64.73.

Fed policy makers said they needed to wait for more evidence that the recent weakness in the pace of economic activity is transitory before taking steps to tighten its loose stance, according to the minutes of this month’s policy meeting.

The benchmark Sensex index rose 0.18% or 53.74 points to 30,355.38. So far this year, it has gained 14%.

So far this year, the rupee has gained 5%, while foreign investors bought $7.78 billion and $10 billion in local equity and debt markets, respectively.

The 10-year bond yield was trading at 6.673% compared to its previous close of 6.681%. Bond yields and prices move in opposite directions.

Asian currencies were trading higher. South Korean won was up 0.78%, Malaysian ringgit 0.33%, Taiwan dollar 0.32%, China renminbi 0.3%, Thai baht 0.22%, Indonesian rupiah 0.17%, Philippines peso 0.14%, China offshore 0.11% and Singapore dollar 0.08%. However, Japanese yen was down 0.11%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 96.936, down 0.31% from its previous close of 97.351.

Traders were cautious ahead of the key Opec (Organization of the Petroleum Exporting Countries) decision in Vienna on Thursday. Opec and its allies agree on extending oil output cuts by nine months, according to a Bloomberg report.

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