Rupee inches up on last day of fiscal, runs into "usual" importer orders
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The Indian rupee was trading higher versus the U.S. currency on Friday, helped by the dollar's struggles and the positive risk mood.
The rupee was quoting at 82.20 to the dollar at 11:32 a.m. IST compared with 82.3375 in the previous session. The local currency reached a high of 82.10.
"The usual importers' orders that we consistently see on dips (on USD/INR) means the 82-level holds," a trader at a private sector bank said.
"On dips, it is either the oil companies or the Reserve Bank of India that the rupee has to contend with. The last day of the fiscal year is an added reason for the RBI to buy dollars."
The rupee's level on the last day of the fiscal year could potentially impact the RBI's dividend payout to the government, according to economists.
Asian currencies were higher on the day, assisted by the upbeat risk that affected demand for the safe-haven dollar and U.S. bonds. Receding worries over the U.S. banking sector is prompting investors to be more constructive on risk.
The two-year U.S. yield is now at 4.12%, about 55 basis points (bps) off recent lows. The dollar index has declined to around the 102-level.
U.S. Federal Reserve rate hike expectations have responded to the abating banking fears. There is now a 55% chance that the Fed will raise rates at the May meeting, compared with around 16% a week ago, according to the CME FedWatch Tool.
Investors' focus will now shift to U.S. inflation, which was seen as key before the banking turmoil. The U.S. core PCE (Personal Consumption Expenditures) Price Index is due later Friday.
"Here, the Fed will be hoping there are signs of cooling inflation," Michael Hewson, chief market analyst at CMC Markets, said.
