UAE: Indian rupee touches 6-month high but retreats after likely intervention

The market is also buying, as current levels on the dollar-rupee pair are quite appealing for importers, says a foreign exchange trader

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Photo: Reuters file

Published: Thu 7 Mar 2024, 9:35 AM

Last updated: Thu 7 Mar 2024, 9:37 AM

The Indian rupee rose to its strongest level in six months on Thursday — but likely intervention from the Indian central bank eroded the unit's early gains.

The South Asian currency stayed firm and rose 9 paise to 82.74 against the US dollar (22.54 against UAE dirham) in early trade on the back of a weak American currency overseas and sustained inflow of foreign funds.

It rose to an intraday high of 82.7350, its highest since early September, before likely intervention from the Reserve Bank of India (RBI) ate into the currency's gains, four traders said.

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In addition, "the market was also buying", as current levels on the dollar-rupee pair are quite appealing for importers, a foreign exchange trader at a state-run bank said.

The dollar index was down at 103.22, hovering close to its lowest level in a month that it hit on Wednesday, after US bond yields fell following the release of data that signalled some softening in the labour market and Federal Reserve Chair Powell's remarks that were not as hawkish as some had expected.

Weakness in the dollar is bound to "support rupee" in early trading but significant appreciation is unlikely due to strong local dollar demand, said Arnob Biswas, head of foreign exchange research at SMC Global Securities.

Investors now await the release of US jobless claims data due later on Thursday and the non-farm payrolls report due on Friday.

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Published: Thu 7 Mar 2024, 9:35 AM

Last updated: Thu 7 Mar 2024, 9:37 AM

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