Rupee recovers to 63.90 per dollar

Mumbai: After making losses for five consecutive sessions, the Indian rupee on Friday strengthened against the dollar with the equity markets trading 500 points higher in afternoon session.

Traders are cautious ahead of the US job report data, which is due later today. Earlier, the Fed Reserve said that it won’t tighten policy until it is “reasonably confident” that inflation will return to its target and the labour market will improve further, Bloomberg reported.

The local unit opened at 64.12 per dollar and touched a high of 63.90. At 2.03pm, the home currency was trading at 63.96, up 0.44% from its previous close of 64.24.

The Sensex rose 1.85%, or 490.80 points, to 27,089.91 points in afternoon trade. Since 13 April, the local equity markets have fallen by over 2,200 points on the expectation of weak monsoon, muted earnings and threat of minimum alternate tax on foreign funds. Foreign institutional investors (FIIs) sold $2.08 billion in equity markets in the last 13 out of 14 sessions, except on 21 April when they bought $2.6 billion.

Most Asian currencies were trading higher. The Indonesian rupiah was up 0.35%, Philippines peso was up 0.19%, Singapore dollar was up 0.13%, Taiwan dollar and South Korean won were up 0.12% each. However, the Japanese yen and Malaysian ringgit were down 0.23%.

The yield on India’s 10-year benchmark bond was trading at 7.952% compared with its Thursday’s close of 7.995%. Bond yields and prices move in opposite directions.

Since the beginning of this year, the rupee has lost 1.44% against the dollar, while FIIs have bought $6.86 billion from local equity and $7.01 billion from bond markets.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 94.660, up 0.03% from its previous close of 94.635.