Indian rupee gains recouping opening losses; outperforms peers
The Indian rupee was trading higher to the US currency on Thursday, as falling oil prices and lack of interest to build long dollar positions helped the local unit recover early losses.
The rupee was trading at 79.31 per US dollar by 0544 GMT, compared with 79.45 in the previous session. The rupee opened at 79.5250 and had fallen to as low as 79.66.
The rupee is "yet again" doing better that other Asian currencies, and the bias has slightly shifted to "selling the pair (USD/INR) on rallies", said a trader at a Mumbai-based bank.
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The Korean won tumbled more than 1%, while the Chinese yuan, the Indonesian rupiah and the Thai baht dropped between 0.2% to 0.5%.
The trader put down rupee's relative outperformance to oil prices and "the lack of appetite of speculators" to buy dollars.
Oil prices declined on Thursday, taking its losses over last three sessions to almost 10% on concerns over demand.
Some economists cutting India's growth forecast on the back of a lower-than-expected June quarter gross domestic product reading had little impact on the rupee.
Rupee's volatility remains muted despite risks from the US Federal Reserve's hawkish stance. The Fed had signalled that it will not temper down the pace of rate hikes until inflation is under control, and that a cut in borrowing cost next year was unlikely.
On Wednesday, Cleveland Fed chief Loretta Mester said that the US central bank will need to raise interest rate above 4% by early next year and hold it there to tamp down inflation.
The 2-year Treasury yield climbed to 3.52% in Asia trading, the highest level since late 2007.
Indian shares declined, tracking rest of Asia, but were well of the day's lows.
