Indian rupee treads water, bond yields slightly higher
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The Indian rupee treaded water in morning trade on Wednesday as the market weighed gains in the domestic share market and slight falls in international crude oil prices against strong dollar demand driven by U.S. interest rate rises.
The U.S. dollar retreated on Wednesday as the euro extended its overnight bounce on relief that Europe might be able to avoid the worst fears concerning energy shortages, and on the chance the European Central Bank might deliver a more aggressive rate hike.
The partially convertible rupee was trading at 79.96 per dollar, little changed from its close of 79.94 on Tuesday, when it had hit a record low of 80.0650.
"We expect the pair to trade in the range of 79.80-80.10 this week," economists at HDFC Bank said in a research note.
The Reserve Bank of India has been aggressively intervening in the market to prevent runaway depreciation in the currency in recent weeks, but traders said that it had not been active so far on Wednesday.
Asian currencies were trading mixed against the dollar while Indian shares were up 1.2%. [EMRG/FRX] [.BO]
Oil prices fell slightly in early Asian trade, pressured by global central bank efforts to tame inflation and ahead of expected builds in U.S. crude inventories as product demand weakens. [O/R]
In the domestic debt market, the benchmark 10-year bond yield was trading 2 basis point higher at 7.45%.
