The Indian rupee on Tuesday strengthened marginally against the US dollar after local equity markets gained for the sixth consecutive session. Traders are cautious and are avoiding large positions ahead of the key gross domestic product (GDP) and fiscal deficit data due today after 5.30pm.
The rupee opened at 67.16 per US dollar. At 9.12am, the home currency was trading at 67.12, up 0.08% from its previous close of 67.17.
Gross value added (GVA) would have grown by 7.2% in the March quarter compared with 7.1% in the December quarter, while GDP growth will be at 7.5% from 7.3% a quarter ago, aBloomberg poll showed.
India’s benchmark Sensex index rose 0.34% or 92 points to 26,817.75. In the last six days, Sensex has gained 6% or 1,500 points. So far this year, Sensex has gained 2.8%.
On Wednesday, India, the US and China will announce manufacturing purchasing mangers index, while on Thursday, the US will announce jobs data and crude oil inventories along with factory orders data.
Traders will be also cautious on a possible June rate hike in the US. The US Federal Open Market Committee’s (FOMC) meet scheduled for 14-15 June will decide whether or not to increase key lending rates.
So far this year, the rupee has weakened 1.51%, while foreign institutional investors (FIIs) have bought $2.12 billion from the local equity market and sold $980.1 million in debt markets.
Most Asian currencies were trading higher. Singapore dollar was up 0.2%, Indonesian rupiah 0.19%, South Korean won 0.13%, Thai baht 0.12%, Malaysian ringgit 0.1% and Taiwan dollar 0.06%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 95.571, up 0.06% from its previous close of 95.521.
Meanwhile, India’s 10-year bond yield was trading at 7.462%, as compared with its Monday’s close of 7.461%.