Rupee strengthens against US dollar ahead of Gujarat exit polls

Mumbai: The Indian rupee strengthened against the US dollar ahead of the exit poll predictions of Gujarat election on Thursday.

At 2pm, the home currency was trading at 64.31 a dollar, up 0.20% from its Wednesday’s close of 64.44. The rupee opened at 64.32 a dollar and touched a high and a low of 64.25 and 64.33, respectively.

As Gujarat goes for the second and final phase of voting for the assembly elections, all eyes now on exit poll predictions that will come in the evening. The results of both Gujarat and Himachal Pradesh elections will be declared on Monday.

Overnight, the US Federal Reserve increased interest rates and raised its outlook for economic growth in 2018 without lifting its forecast for the number of hikes next year, while chair Janet Yellen struck a dovish tone in her final scheduled press conference, Bloomberg reported.

The benchmark Sensex rose 0.06%, or 18.72 points, to 33,034.32. So far this year, it has gained 25%.

After hitting a 17-month high, bond yield fell for the second session on Thursday on news of repurchase announcement of debt by the government, up to Rs20,000 crore, on 18 December to prematurely redeem some stock by utilizing surplus cash balances.

The 10-year bond yield was at 7.152%, compared to its previous close of 7.173%. Bond yields and prices move in opposite directions.

So far this year, the rupee has gained 5.38%, while foreign institutional investors have bought $8.32 billion and $22.87 billion in equity and debt, respectively.

Asian currencies were trading higher. South Korean won was up 0.33%, Malaysian ringgit 0.21%, Indonesian rupiah 0.18%, China renminbi 0.15%, Taiwan dollar 0.14%, China offshore 0.1%, Thai baht 0.07% and Philippines peso rose 0.07%. However, Japanese yen was down 0.08%, Hong Kong dollar 0.07% and Singapore dollar 0.05%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 93.374, down 0.06%, from its previous close of 93.429.