Rupee closes stronger against dollar ahead of US non-payroll data release

Mumbai: The Indian rupee strengthened for the fourth consecutive sessions against the dollar ahead of the US non-payroll data due later on Friday.

Rupee closed at 68.23 a dollar, up 0.18% from its previous close of 68.35. The home currency opened at 68.29 against the US dollar. So far this year, it has fallen 3.04%.

India’s benchmark Sensex index closed at 26,230.66 points, down 1.24% or 329.26 points from its previous close. So far this year, it has risen 0.43%.

On the domestic front, traders are cautious ahead of the Reserve Bank of India’s bi-monthly policy on 7 December. Most of the brokerages expect the RBI to cut rates by 25 basis points. One basis point is one-hundredth of a percentage point.

Traders are also cautious ahead of the Italian referendum scheduled for Sunday and mid-December US Federal Reserve policy.

Bond yield gained after the government raised the limit on bonds it issued to the Reserve Bank of India to help it mop up excess liquidity in the financial system. The cap on the so-called Market Stabilization Scheme was increased to Rs6 trillion from Rs300 billion for the year ending March 2017, Bloomberg reported.

The benchmark 10-year government bond yield closed at 6.243%, compared to Thursday’s close of 6.215%. Bond yields and prices move in opposite directions.

So far this year, foreign institutional investors have bought $4.15 billion in equities and sold $3.68 billion in debt.

Asian currencies were trading higher. Indonesian rupiah was up 0.392%, Singapore dollar 0.246%, Malaysian ringgit 0.231%, Philippines peso 0.192%, Japanese yen 0.158% and Thai Baht 0.149%. However, South Korean won was down 0.431% and China renminbi 0.038%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 100.98, down 0.06% from its previous close of 101.04.