abstrak:MUMBAI, July 11 (Reuters) - The Indian rupee was trading higher against the U.S. currency on Tuesday
MUMBAI, July 11 (Reuters) - The Indian rupee was trading higher against the U.S. currency on Tuesday, tracking an advance in its Asian peers.
The rupee was trading at 82.3600 against the dollar at 10:30 a.m. IST against 82.5650 in the previous session.
\“We anticipate speculators liquidating their long (dollar) positions built last week, with exporters joining in for hedging purposes,\” said Anindya Banerjee, head research - FX and interest rates at Kotak Securities.
Unless the Reserve Bank of India takes aggressive action to buy dollars, there is a “high possibility” of the rupee strengthening to around 82.15-82.20 on spot, Banerjee said.
The Korean won led Asian currencies higher, while risk appetite in the region firmed up amid a drop in the dollar index.
The dollar index dropped to a two-month low of 101.73 in Asia trading on Tuesday, extending Mondays fall. The fall in the dollar index was largely attributed to a decline in U.S. yields.
The two-year U.S. yield was down to 4.8515%, off the recent high of 5.12%, ahead of the U.S. inflation data due on Wednesday. The 10-year yield also dropped below 4% in Asia trading on Tuesday.
Investors assessed comments Federal Reserve officials made on Monday, which indicated that additional interest rate hikes were needed to bring down still-high inflation, but that the end to the U.S. central banks current monetary policy tightening cycle was closer.
Traders expect the Fed to raise interest rates by 25 basis points (bps) this month, but the outlook on further rate hikes is uncertain.
In the wake of a decline in U.S. yields, rupee far forward premiums rose. The one-year implied forward yield on the dollar against the rupee was up three bps at 1.64%.
Reporting by Siddhi Nayak; Editing by Janane Venkatraman
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