By Jaspreet Kalra
MUMBAI (Reuters) – The Indian rupee rose on Wednesday tracking most of its regional peers which were boosted by a rally in the Chinese yuan, while dollar sales from state-run banks also helped the local currency.
The rupee ended at 83.5925 against the U.S. dollar, compared to its previous close at 83.67.
The currency rose to as high as 83.5150 during the day, but trimmed its gains as the dollar index firmed in the latter half of the session.
The yuan rose above 7 per dollar for the first time since May 2023, lifted by investor optimism a day after broad policy easing measures were announced to shore up the country’s flailing economy.
State-run banks were “on the selling side (on USD/INR),” while near-term sentiment on the local currency is also positive, a foreign exchange trader at a private bank said.
Other Asian currencies were mostly higher, led by the Indonesian rupiah and Malaysian ringgit, which were up 0.5% each.
“If USD/CNH breaks with momentum below 7.00, we think it would be broadly supportive of global EM currencies and help tilt the dollar lower,” ING Bank said in a note.
The dollar index has been on the backfoot amid rising wagers on another 50 basis points rate cut by the Federal Reserve in November.
Interest rate futures are currently pricing in a 61% chance of the Fed delivering a 50 bps cut, compared to 53% a day earlier, according to CME’s FedWatch tool.
Remarks from Fed policymakers are in focus this week with Chair Jerome Powell slated to speak on Thursday alongside a slew of other officials.
(Reporting by Jaspreet Kalra; Editing by Varun H K)
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