Tuesday, December 10, 2019
Home > Economy > Indian rupee gains most in a week

Indian rupee gains most in a week

MUMBAI: The Indian rupee gained the most in over a week as the government’s move to scrap a bond auction led to hopes that the fiscal deficit will be contained, but caution prevailed ahead of US jobs data.
India scrapped a deferred 150-billion-rupee bond sale, citing the government’s comfortable cash position, leading to hopes that Finance Minister P. Chidambaram will be able to contain the fiscal deficit within his 4.8 percent target.
Strong bidding at a sale of mobile airwaves means that the government will likely garner more than the budgeted $1.8 billion at the sale, helping it bridge the fiscal gap further.
Most emerging currencies retreated in late trade on caution ahead of US jobs data as investors took profit.
Mixed US data on Wednesday offered little support for the greenback.
Growth in the service sector picked up pace in January while private employers added 175,000 jobs in January, the smallest gain since August.
Still, many analysts are optimistic that the closely watched US non-farm payrolls report on Friday will show January hiring rebounded after a weak December, which saw a payroll gain of just 74,000.
“I think the rupee is in for range-bound trading. It will be critical to see how the emerging markets cope as taper is reduced. India is better positioned this time to face the taper,” said Suresh Nair, director at ADMISI Forex India Pvt Ltd.
He forecasts the currency to trade in a 61.80 to 63.60 band to the dollar in the near term.
Also awaited is a raft of data starting with India’s advance GDP numbers for the current fiscal year on Friday. India will also report December factory data and January inflation numbers next week.
The rupee ended at 62.365/375 per dollar, compared with Wednesday’s close of 62.57/58. It gained 0.3 percent, its biggest daily win since Jan. 28.
In the offshore non-deliverable forward, the one-month contract was at 62.72, while the three-month was at 63.60.