Rupee gains 5 paise to open at 82.66 against the US dollar

The dollar witnessed its sharpest drop in a month and a half on Wednesday after weak US jobs data reduced the chances of further Federal Reserve rate hikes.

The US dollar index – which measures the currency against six developed-market peers including the yen and euro – was little changed at 103.57 after pulling back from as high as 104.36 overnight.

On Tuesday, the rupee ended 8 paise lower at 82.71 a dollar.

The US JOLTS job openings data dipped to a 2-1/2 year low in July, raising hopes that the Federal Reserve would keep interest rates high for some time. 

The two-year Treasury yield, which is most sensitive to expectations for monetary policy, slumped as much as 18 basis points (bps) to 4.871% before recovering to around 4.9% in Asian trading hours. The 10-year yield held near Tuesday’s low of 4.106%, a level last seen on August 11, hovering at around 4.13%, Reuters reported.

Among other currencies,  the Japanese yen hovered around 146 per dollar following its overnight rebound from a 10-month trough at 147.375. The Chinese yuan weakened slightly in offshore markets to 7.2929 per dollar.

The euro edged down 0.1% to $1.0867, while the Aussie dollar dipped 0.17% at $0.64685.

Meanwhile, crude oil prices rose. Brent crude futures gained 0.30% to $85.75 a barrel, while US West Texas Intermediate crude (WTI) added 0.38% to $81.47 a barrel.

On the domestic front, the Indian benchmark equity indices, Sensex and Nifty, were trading higher in the pre-opening session.

On Tuesday, the Foreign institutional investors (FIIs) net bought Indian shares worth ₹61.51 crore, while Domestic Institutional Investors (DIIs) net purchased shares to the tune of ₹305.09 crore, as per provisional data available on the exchanges.

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(With inputs from Reuters)

Updated: 30 Aug 2023, 09:06 AM IST