MUMBAI: The Indian rupee edged up on Tuesday, tracking gains in most Asian peers, as the dollar index dipped ahead of a key US inflation reading, which is expected to provide cues on the Federal Reserve’s monetary direction.
The rupee closed at 85.81 against the US dollar, up 0.2% on the day. While the local currency fleetingly fell below the 86 handle in the previous session, its quick recovery also prompted short wagers on the currency to be liquidated, adding to its upward momentum, traders said.
The rupee’s range-bound behaviour over the last two weeks has also sparked interest in selling short-term volatility among large corporates and interbank participants, bankers said. The dollar index was down 0.2% at 97.9, with most Asian currencies rising, while the offshore Chinese yuan was little changed.
“We expect INR to trade with a strengthening bias in the near term, unless India gets hit by higher tariffs compared to the region,” ING said in a note.
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