UAE: Indian rupee rises against dirham on drop in US yields

UAE: Indian rupee rises against dirham on drop in US yields

Published: Mon 6 Nov 2023, 10:28 AM

The Indian rupee strengthened on Monday after the US treasury yields fell and the dollar ceded ground on bets that the U.S. Federal Reserve is likely done hiking rates in the current cycle.

The rupee was at 83.1850 (Dh22.66) against the U.S. dollar as of 10:40 a.m. IST, compared with its close at 83.2850 in the previous session.

Asian currencies were up sharply, led by the Malaysian ringgit and Korean won, but the rupee was a laggard amid persistent U.S. dollar demand from importers, traders said.

US treasury yields fell, after data released on Friday signalled that the country's labour market was cooling. The 10-year U.S. treasury yield was at 4.57% in Asia, well below last month's multi-year peak above 5%.

The odds of a Fed rate hike at the December meeting are now at just 7%, down from 20% a week earlier, according to .

The developments are "slightly positive for rupee," said Dilip Parmar, a foreign exchange research analyst at HDFC Securities. But foreign fund outflows are likely to weigh on the local unit and keep the prevailing range intact, Parmar added.

The rupee has been range-bound between 83.0225 and 83.2950 for over one month. Overseas investors have