MUMBAI: The Indian rupee closed stronger on Friday and posted its best daily performance in two weeks aided by robust domestic economic data and slight weakness in the greenback.
The rupee ended at 83.2875 against the US dollar, higher by 0.13% compared to its previous close at 83.3950.
The currency had touched an intra-day high of 83.2525 early on Friday helped by inflows, but dollar demand from local oil companies and importers eroded some of the local unit’s early gains, traders said.
It posted a weekly gain of 0.1% and hovered in a range between 83.2525 and 83.3950.
Dollar demand has been “constant for the past two weeks,” a foreign exchange trader at a state-run bank said, referring to appetite from importers, including local oil companies, to pick up dollars when the rupee gains.
The dollar index was last quoted lower at 103.3 while Asian currencies traded on a mixed note. The 10-year US treasury yield declined to 4.31% in Asia.
India’s economy expanded by 7.6% in the September quarter, higher than the 6.8% expected by economists polled by Reuters, prompting economists to raise their forecasts for India’s GDP growth for the current fiscal year.
In the near term, the rupee is likely keep drifting lower as local dollar demand is not showing signs of abating, said Arnob Biswas, head of foreign exchange research at SMC Global Securities.
Investors now await remarks from US Federal Reserve Chair Jerome Powell who is slated to speak at two events later in the day and could offer cues on how well placed the market’s expectations are on the Fed’s policy trajectory.
Investors currently expect the Fed to start easing rates in May in light of recent economic data in the US which signalled that inflation is cooling and the labour market is softening.
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