USD/INR: The Indian rupee rose against the dollar
|The USDINR pair made a gap-down opening at 74.80 levels and traded in the range of 74.71-74.93 with a sideways bias. The pair finally closed at 74.78 levels. The RBI set the reference rate at 74.8607. The Indian rupee rose against the dollar today because Brent crude oil prices retreated over 3% after touching a three-year high on Wednesday, lifting investor sentiment for the Indian rupee. A sharp rise in domestic equity indices also supported the Indian rupee.
Asian equities rose in line with US equity indices after risk sentiment improved due to optimism over a deal on the US debt ceiling. US Senate Minority Leader Mitch McConnell indicated he would give a short-term debt limit extension to Republicans, which would ease some pressure on Congress to prevent a default according to reports. Investors worldwide await the release of key non-farm payrolls data in the US, due on Friday, which could provide additional clues on the timing of the US Federal Reserve's next moves on tapering monthly asset purchases. The 10-year G-Sec benchmark 06.10 GS 2031 closed the day at 6.267% levels.
On an annualized basis, a premium on the one-year, exact period dollar/rupee contract rose to 4.47% as against 4.44% of the previous close. Industrial Production in Germany showed a bigger-than-expected drop in August, suggesting that the recovery in the manufacturing sector losing momentum. Eurozone’s economic powerhouse’s industrial output drops sharply by -4% MoM, vs. a -0.4% drop expected and 1% last.
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