The rupee rose to a 30-month high of 63.32 vs dollar while Sensex rose over 200 points at day's high.
The rupee rose to a 30-month high of 63.32 against the US dollar today, continuing its upward march in 2018. The rupee ended at 63.36, as compared to its Thursday's close of 63.40. The rupee traded in a range of 63.32 and 63.42 today. A higher domestic equity market also helped lift the rupee. The Sensex and Nifty hit record highs today. The rupee also got a boost from a broad weakness of dollar against other major currencies.
10 Things To Know Rupee, Sensex Gain Today
- Despite signs of a strong US labour market, globally the dollar was soft today, hovering just above its three-month low against a basket of major currencies. The dollar index stood at 91.877, near Tuesday's three-month low of 91.751. The dollar Index is a measure of the value of the US dollar relative to a basket of foreign currencies.
- "The dollar looks very weak at the moment. And I think the reason comes down to the fact that US long-term bond yields are very low despite the Fed's rate hikes," said Masashi Murata, senior currency strategist at Brown Brothers Harriman. The 10-year U.S. Treasuries yield stood at 2.460 percent, below its seven-month peak of 2.504 percent touched on December 21. Those levels are little different from about a year ago, even after the Fed hiked interest rates three times last year and market expectations for another three hikes in 2018.
- Capping US long-term bond yields were expectations that inflation will remain tame as wage growth has been slower than before the 2007-2008 financial crisis.
- The rupee also got a lift this week from recent economic data. India's factory activity expanded at the fastest pace in five years in December, a private sector survey showed on Tuesday, buoyed by a rise in output and new orders, which allowed firms to raise prices. Activity in India's services industry bounced back to modest growth in December after contracting in the previous month, a private survey showed on Thursday.
- Some analysts expect the rupee to strengthen further from here. In first quarter of 2018, the rupee could be mildly positive against US dollar and may rise up to 63.00 levels, according to forex advisory firm IFA Global.
- Back in the stock markets, Sensex and Nifty hit record highs, boosted by higher global markets. The Sensex rose over 200 points to set a new high of 34,188 while Nifty hit 10,566. The Sensex ended at 34,153, up 184 points while Nifty settled at 10,558.
- Most of the Asian markets were higher today, boosted by strong US jobs data which pointed to firming global economic growth.
- The US National Employment Report on Thursday showed US private employers added 250,000 jobs in December, the biggest monthly increase since March and well above economists' expectations of a rise of 190,000.
- That helped the Dow Jones Industrial Average sail past the 25,000-mark for the first time. S&P 500 gained 0.40 per cent while the Nasdaq Composite added 0.18 percent, both notching record closing highs.
- Back in the domestic stock markets, analysts would be closely watching the government's advance estimates of this year's GDP growth. The Central Statistics Office is set to announce the data later in the day. (With agency inputs)