Rupee stays pinned in narrow range as Chinese yuan rebounds
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The Indian rupee eked out slim gains on Tuesday, as the Chinese yuan clawed back losses, but stayed within its recent narrow trading range.
The rupee was up 0.05% to 81.63 per U.S. dollar by 10:40 a.m. IST, having opened at 81.58. It has traded between these two levels since.
The currency has remained in a tight range lately, not reacting much to a jump in equity inflows even as Indian stocks surged to record highs. [.BO]
Traders reckon 81.40-81.90 was going to be the rupee's new range as positive global cues were being countered by huge cash dollar demand domestically.
On the day, Asian currencies and stocks broadly rose as Chinese assets rebounded after the country's struggling property received fresh support. The yuan and Shanghai stocks led the rally, up 0.8% and 2.2%, respectively.
Improvement in risk sentiment saw the dollar index fall 0.4%, after having risen overnight as some Federal Reserve officials pushed back against rate cuts next year.
The Fed needs to raise rates quite a bit further to control inflation and lower it toward the central bank's 2% goal, St. Louis Fed President James Bullard said.
The U.S. central bank is widely expected to hike rates by an additional 50 basis points when it meets on Dec. 13-14.
Market participants now await India's economic growth figures on Wednesday. For the July-September quarter, the annual growth rate is expected to be at 6.2% after double-digit expansion in the previous quarter, a Reuters poll found.
However, higher interest rates and weaker exports amid high inflation were likely to curb activity in the final quarter of the calendar year, the poll added.
