By Jaspreet Kalra
MUMBAI (Reuters) – The Indian rupee logged modest gains in early trade on Tuesday, aided by mild dollar inflows, helping the currency avoid a decline in most regional peers, although bids from state-run banks limited the currency’s gains.

The rupee was at 86.68 against the U.S. dollar as of 11:15 a.m. IST, up 0.1% on the day.

The local currency has strengthened for three consecutive sessions, aided by a broadly softer dollar amid concerns about a growth slowdown in the United States on the back of erratic trade policy changes.

Easing demand to buy dollars at the daily reference rate, called the fix, has also lifted the rupee, alongside dollar sales by foreign banks, a senior trader at a bank said.

State-run banks were spotted bidding for dollars though, four traders said, keeping a lid on further gains.

Meanwhile, the dollar hovered near a five-month low against major peers after data on Monday showed U.S. retail sales rebounded in February but the growth was well below expectations.

A string of soft U.S. economic data, coupled with uncertainty about the inflationary impact of tariffs, has prompted investors to rethink their approach, pushing the dollar index down by about 5% so far this year.

In recent sessions, “sustained dollar selling from exporters and foreign banks, alongside a broadly weaker greenback,” have aided the rupee, FX advisory firm IFA Global said in a note.

The firm expects the rupee to trade in the 86.55-86.80 range in the near term.

Meanwhile, dollar-rupee far forward premiums dipped ahead of the U.S. Federal Reserve’s policy decision and economic projections due on Wednesday. The one-year implied yield was down 4 basis points at 2.13%.

(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.



Source link

Shares:
Leave a Reply

Your email address will not be published. Required fields are marked *