By Jaspreet Kalra
MUMBAI (Reuters) – The Indian rupee jumped to its highest level in over three weeks on Tuesday, boosted by likely dollar inflows and persistent weakness in the greenback, which teetered near a five-month low against major peer currencies.
The rupee rose to a peak of 86.54 against the U.S. dollar, its highest since February 21, before closing at 86.57, up over 0.2% on the day.
At least three large foreign banks sold dollars, helping lift the rupee, a trader at a mid-sized private bank said. Bids by state-run banks, however, kept a lid on further gains, traders said.
The rupee has strengthened for four consecutive sessions and is up about 0.8% so far this month, aided by a broadly weaker greenback, an uptick in exporter dollar sales and modest inflows.
India’s benchmark equity indexes, the BSE Sensex and Nifty 50, rose more than 1% each on Tuesday, powered by financial and metal stocks.
Meanwhile, the dollar index eased nearly 0.2% to 103.3 and Asian currencies were largely rangebound.
Weak U.S. economic data, coupled with uncertainty about the inflationary impact of President Donald Trump’s trade policies have weighed on the dollar in recent weeks.
The Federal Reserve’s policy decision and interest rate trajectory will be closely watched on Wednesday to gauge its assessment of policy changes under the Trump administration.
“We expect the Fed to acknowledge that downside risks to growth have increased at tomorrow’s FOMC meeting although not sufficiently to encourage the Fed to consider cutting rates again at the current juncture,” MUFG Bank said in a note.
While the U.S. economic data calendar is relatively light on Tuesday, the focus will be on any developments from a phone call between Trump and Russian President Vladimir Putin about ending the war in Ukraine.
(Reporting by Jaspreet Kalra; Editing by Sonia Cheema)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibility for its content.
