Rupee opens higher at 66.42 against US dollar

Mumbai: The Indian rupee on Monday strengthened against the US dollar ahead of key inflation data due later in the day.

At 9.08am, the home currency was trading at 66.46, up 0.13% from its previous close of 66.54. The local unit opened at 66.42 per US dollar.

The benchmark Sensex index rose 0.34% or 87.12 points to 25,697.33 points.

The government will release Wholesale Price Index (WPI)-based inflation data after 12.30pm and Consumer Price Index (CPI)-based inflation data after 5.30pm.

According to Bloomberg estimates, WPI will be at -4.38% in August as against -4.05% in July. CPI will be at 3.54% for August compared to 3.78% in July.

The Index of Industrial Production (IIP) rose 4.2% in July, compared with a revised 4.4% in June, data released by the government on Friday showed.

India’s current account deficit (CAD) further contracted in the first quarter of 2015-16, as lower global crude oil prices helped rein in India’s import bill. In the April-June period, the current account deficit came in at $6.2 billion, or 1.2% of gross domestic product (GDP), compared with $7.8 billion, or 1.6% of GDP, in the year-ago period, balance of payments data released by the Reserve Bank of India (RBI) showed.

The yield on India’s 10-year benchmark bond was trading at 7.769% compared with its Friday close of 7.773%. Bond yields and prices move in opposite directions.

Since the beginning of this year, the rupee has lost 5.06%, while foreign institutional investors (FIIs) have bought $3.63 billion from local equity and $6.14 billion from bond markets.

Most Asian currencies were trading higher. Taiwan dollar was up 0.28%, South Korean won 0.26%, Philippines peso 0.21%, China offshore 0.12%, Japanese yen 0.1%, China renminbi 0.08%. However, Thai baht was down 0.12%, Indonesian rupiah 0.08%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 95.098, down 0.10% from its previous close of 95.194.

The US Federal Reserve is scheduled to meet on 16-17 September, the outcome for which is eagerly awaited.