Rupee strengthens past 67 per US dollar

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Mumbai: The Indian rupee on Thursday strengthened past the 67 mark against the US dollar as foreign institutional investors (FIIs) continued to buy local equity and bonds in the markets. This was the 12th out of 16 trading sessions when the rupee is trading higher.

The local currency opened at 67.01 a dollar and touched a high of 66.97, a level last seen on 10 June. At 9.16am, the home currency was trading at 66.98, up 0.12% from its previous close of 67.06.

In the last 11 trading sessions, FIIs bought $650.89 million in debt and in the last nine trading sessions, FIIs bought $511.62 million in local equity.

India’s benchmark Sensex index rose 0.15%, or 42.62 points, to 27,857.80. So far this year, it has gained 6.6%.

The 10-year bond yield fell in 16 out of 22 trading sessions. Hopes that the new governor of Reserve Bank of India may be more inclined to cut rates also helped sentiment. The weather department said that monsoon rains have covered nearly all of India and currently it is 4% above normal, which also helped bond yields.

India’s 10-year bond yield was trading at 7.269%, a level last seen on 19 June 2013, compared with Wednesday’s close of 7.284%.

The government will issue Wholesale Price Index-based (WPI-based) inflation data for June on 14 July. According to Bloomberg analyst estimates, WPI will be at 1.3% in June compared to 0.79% in May.

So far this year, the rupee is down 1.25%, while FIIs have bought $3.23 billion in equity and sold $1.35 billion in debt markets.

Most of the Asian currencies trading higher. South Korean won was up 0.46%, Malaysian ringgit 0.29%, Taiwan dollar 0.27%, Philippines peso 0.12% and Thai baht 0.08%. However, Japanese yen was down 0.08%, while China offshore and Singapore dollar fell 0.05% each.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 96.206, down 0.01% from its previous close of 96.216.

Oil fell Wednesday, with US crude settling at a two-month low of $44.75 a barrel. Weighing on crude were US inventories data, which showed crude stocks fall by 2.54 million last week, as well as a build of 1.2 million gasoline barrels.