The rupee strengthened by five paise to 61.81 against the dollar in early trade today at the Interbank Foreign Exchange on increased selling of the US currency by exporters and banks. Forex dealers said besides increased selling of the American currency, the dollar's weakness against other currencies overseas also supported the rupee but a lower opening in the domestic equity market, limited the rise. The domestic currency had gained eight paise to close at 61.86 against the dollar in yesterday's trade on account of suspected RBI intervention through state-owned banks. Meanwhile, the benchmark BSE Sensex fell by 55.22 points, or 0.19 per cent, to 28,282.83 in early trade today.
Rupee gains on corporate, custodian bank dollar sales
The Indian rupee gained on Tuesday after a volatile trading session as dollar selling by custodian banks and a large corporate helped offset importer demand for the greenback.Traders said gains were also helped by higher Asian currencies on the back of strength in the Japanese yen and a rebound in the Chinese yuan. But sentiment is expected to turn more cautious ahead of the upcoming July- September economic growth data on Friday and the Reserve Bank of India's monetary policy review on Dec. 2. India's economic growth probably slowed to around 5 percent in the three months to September, slipping from 5.7 percent in the previous quarter, two senior finance ministry sources told Reuters, putting pressure on the central bank to cut interest rates. "There was good dollar buying interest seen from importers but good flows with custodian banks helped. We could see this seesaw in the rupee continue until the policy," said Vikas Babu Chittiprolu, a senior foreign exchange dealer with Andhra Bank. The partially convertible rupee closed at 61.86/87 per dollar versus Monday's close of 61.9350/9450. Traders are broadly expecting the rupee to hold in a 61.50 to 62.50 range until the RBI policy next Tuesday, with most expecting no change in interest rates but only a more dovish policy tone from the RBI.
China's yuan inches up as PBOC sets midpoint at 8-month high
China's yuan edged up on Wednesday after the central bank set the guidance rate at an eight-month high, signalling that policymakers don't intend to let the currency depreciate for now, traders said.By midday, spot yuan stood at 6.1344 per dollar, 0.03 per cent firmer than Tuesday's close. The People's Bank of China (PBOC) fixed the yuan's daily midpoint at 6.1354 per dollar, the highest level since mid-March, up 0.06 per cent from the previous day's fix. Despite the surprise interest rate cut last Friday that tempered bullish bets on the yuan, traders and economists believe the PBOC will attempt to preserve general exchange rate stability through the midpoint, to guard against the risk of a panic selloff in the currency.
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