The rupee firmed on Wednesday to touch a two-week high, bolstered by a slight bias towards bullish wagers on the currency rupee among interbank traders and a pickup in exporter hedging activity.
The rupee rose to 88.4750 against the U.S. dollar in early trading, its strongest level since November 4.
The currency has lumbered between 88.50-88.80 over a majority of the current month, hemmed in by worries over a missing U.S.-India trade deal and expectations of dollar-selling intervention by the Reserve Bank of India.
"With 88.80 established as a firm resistance for USD/INR, interbank bias has turned slightly on the selling side while exporters have also become a little more active," a trader at a Mumbai based bank said.
A widening gulf between exporter and importer hedging activity has weighed on the rupee over recent weeks, leaving the currency increasingly reliant on central bank interventions to help it hold above its all-time low.
Traders in India's sovereign bond market, meanwhile, also flagged heightened expectations of India's potential inclusion in the Bloomberg Global Aggregate Index following a report by local media outlet Business Standard.
The yield on the country's 10-year sovereign bond was last a touch lower at 6.5237%.
Elsewhere, Asian currencies were flat-to-modestly weaker while the dollar index was steady at 99.5 as investors awaited the release of key U.S. economic data to gauge the future path of benchmark U.S. interest rates.
Initial jobless claims data released on Tuesday showed the number of Americans on jobless benefits surged between mid-September and mid-October. With the dollar index hovering near the top of its recent trading ranges, "any disappointing labour data that renews Fed cut bets would increase the risk-reward skew towards a downside correction," analysts at DBS said in a note.
Source Name : Economic Times