Rupee opens flat against US dollar as traders await key economic data
At 9.55 am, the rupee was trading at 63.89 a dollar, down by 0.09% from its Tuesday’s close of 63.61business Updated: Jan 31, 2018 13:28 IST
The Indian rupee was trading little changed against the US dollar on Wednesday as traders avoided taking long positions ahead of key events due later in the day.
The rupee opened at 63.68 a dollar. At 9.55 am, the home currency was trading at 63.89 a dollar, down from its Tuesday’s close of 63.61.
Traders are awaiting fiscal deficit for April-December and annual gross domestic product (GDP) data for fiscal year 2017 due after 4.30pm. Traders are also cautious ahead of the US Federal Reserve rate decision due later on Wednesday.
Bond yield gained for sixth consecutive month, its longest winning streak since 2000, amid concerns that the government may widen its fiscal deficit target in the budget after the Economic Survey called for a pause in fiscal consolidation.
The 10-year bond yield was at 7.421% compared to its previous close of 7.442%. Bond yields and prices move in opposite directions.
The government will present the Union budget on 1 February and traders will keep an eye on fiscal deficit and borrowing targets for the next fiscal year. Analysts expect the deficit targets for FY18 and FY19 to be raised to 3.5% and 3.2%, respectively, while borrowing target will be Rs6.5 trillion next fiscal compared to Rs6.05 trillion in the current fiscal year.
The benchmark Sensex fell 0.22%, or 79.81 points, to 35,953.92. So far this year, it has gained 5.5%.
So far this year, the rupee has gained 0.41%, while foreign investors have bought $2.08 billion and $1.19 billion in equity and debt market, respectively.
Asian currencies were trading mixed. Indonesian rupiah was up 0.33%, South Korean won 0.22%, Thai baht 0.2%, Taiwan dollar 0.15%, Philippines peso 0.15% and Singapore dollar 0.15%. However, Malaysian ringgit was down 0.44%, Japanese yen 0.1% and China renminbi fell 0.05%.