Indian rupee rises on weaker dollar

The Indian rupee gained slightly on Monday, mirroring gains in other Asian currencies as the US dollar weakened on expectations of a Federal Reserve rate cut later this year.

The rupee strengthened to 83.44 per U.S. dollar by 10:15 am (IST), up from its previous close of 83.4850. This follows a decline in US Treasury yields and the dollar after Friday’s economic data release.

US data showed the unemployment rate rising to 4.1 per cent, with annual wage growth at its slowest in three years, signs of a potential slowdown in the US labour market.

This data bolstered expectations for a September rate cut by the Fed, with CME’s FedWatch tool indicating the probability rising to nearly 76 per cent from 64 per cent a week earlier.

Despite last week’s pressure on Asian currencies, which saw the Japanese yen and offshore Chinese yuan reach multi-year lows, most Asian currencies gained on Monday. The dollar index also fell 0.2 per cent to 104.9.

Traders expect the rupee to trade sideways in the near future, with a range between 83.40 and 83.55 per US dollar.

Attribution: Reuters