The Indian rupee on Monday opened little changed against the US dollar amid mixed trade in Asian currencies and as traders eye fresh developments on trade deal between US and China.

In early deals today, the rupee traded at 71.76 a dollar, down marginally from Friday's close of 71.74. The Indian unit had opened 71.79 a dollar.

The yield on the 10-year Indian government bond was at 6.462% compared with its previous close of 6.467%.

Data released on Friday showed that India’s economy grew at 4.5% in the September quarter, its weakest pace since 2013 as manufacturing output contracted. The Centre's fiscal deficit hit 102.4% of 2019-20 Budget Estimate at ₹7.2 lakh crore at the end of October, government data showed on Friday. The deficit was at 103.9% of 2018-19 Budget Estimate (BE) in the corresponding month a year ago.

Traders now await Reserve Bank of India's bi-monthly policy statement on 5 December. Eight of 10 economists and treasury heads surveyed by Mint expect RBI’s monetary policy committee (MPC) to cut the repo rate, at which RBI lends to banks, by 25 basis points (bps) to 4.9%, while maintaining an accommodative stance. Two expect the RBI to cut rates by 15bps.

In the year so far, the rupee has weakened 2.74%, while foreign investors have bought nearly $13.48 billion in Indian equities and $4.22 billion in debt.

In pre-opening trade, the benchmark Sensex was up 0.18% or 72.69 points at 41093.30 points. Year to date, it has gained 13.1%.

Asian currencies traded on a mixed note. Data showed that China’s manufacturing activity expanded more than expected in November as the Caixin/Markit manufacturing Purchasing Managers’ Index (PMI) came in at 51.8. Caixin and IHS Markit said in a joint press release that the pace of improvement was the strongest since December 2016. Traders now await US jobs data, due later this week. Economists polled by Bloomberg expect 188,000 additions in the month -- a reading that would be the highest since August and help vindicate the US Federal Reserve holding its rate easing cycle.

The South Korean won was up 0.22%, while the Taiwan dollar and Philippines peso were a tad higher. However, the Japanese yen was down 0.18%.

The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 98.33, up from its previous close of 98.273.

Published On : 02-12-2019

Source : Live Mint