Indian Rupee Gains Momentum for the Third Straight Day
Sales of dollars by exporters and foreign banks, along with a generally weaker dollar that was trading close to a five-month low against its main peers, helped the Indian rupee gain momentum for the third straight day today.
Early trade saw the rupee reach its highest level since February 24 at 86.8075, with dealers last quoting at 86.8450 as of 10:55 a.m. IST, up over 0.2 percent on the day, it pared some of its gains.
The dollar index was down 0.2 percent at 103.5, hovering near a five-month low that was reached last week, while other Asian currencies were largely rangebound.
As the dollar index barely moved at 103.7, Asian currencies remained primarily range-bound.
Early trading saw foreign banks giving dollars, which bolstered the rupee, according to a trader at a state-run bank.
Despite pressure from overseas selling of Indian stocks, the rupee has found some breathing room due to the dollar's general weakening, with the local currency up 0.6 percent so far in March.
The rupee is one of the high-yielding currencies that Bank of America now advises long bets on, the bank stated in a note.
On the other hand, figures released indicated that India's merchandise trade deficit decreased to $14.05 billion in February.
Although the local currency has underperformed most of its regional counterparts this month, a generally weaker dollar has also contributed to the rupee's 0.8 percent gain so far in March.
The dollar, US bond yields, and stocks have all been affected by worries about a weakening US economy in the face of escalating trade policy.
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