Rupee ends higher on dollar inflows; Fed testimony in focus

Indian rupees It ended the day stronger Wednesday, shrugging off weakness in its Asian peers, buoyed by steady inflows of dollars into the local stock market.

rupees It closed at 82.0375 per dollar Against a close of 82.1175 on Tuesday.

Some Asian currencies including the Chinese yuan and the Thai baht fell 0.2-0.3 percent, and the Korean won fell about 1 percent.

Gaurang Somaiya, forex and bullion analyst at Motilal Oswal Financial Services, said that the rupee started trading in a very narrow range of 81.80-82.30, and unless it breaks this range there is no trend.

Two dealers said there would likely be dollar inflows with the sale of a large public sector bank and a foreign bank.

foreign investors It has pumped about $1.8 billion into Indian stocks this month, after it bought $5.1 billion worth of shares in May.

BSE Sensex set a record on Wednesday due to continued inflows of foreigners on the back of strong macroeconomic data such as easing inflation and strong domestic growth.

The Dollar Index was steady at 102,570 ahead of US Federal Reserve Chairman Jerome Powell’s testimony to lawmakers later in the day. The Federal Reserve, last week, kept interest rates unchanged, but the projections put forward by policymakers indicated two more rate hikes this year.

As markets look for clarification after mixed messages from the Fed’s point chart last week, a hawkish clarification would boost higher rates for a longer narrative, OCBC analysts said in a note.