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Rediff.com  » Business » Rupee at one-week high ahead of US jobs report

Rupee at one-week high ahead of US jobs report

Last updated on: February 07, 2014 17:42 IST

The rupee rose to a one-week high on Friday to post its first weekly gain in three, helped by favourable flows and rising confidence over the country's defence against any emerging market outflows.

That confidence will be tested later on Friday when the United States is due to post monthly employment data, a key indicator in setting expectations about whether the Federal Reserve will continue its pace of steady cuts in its bond purchases.

"The robustness or otherwise of the employment report will broadly set the rupee's directional trend in the coming weeks," said Param Sarma, chief executive officer at NSP Forex.

The partially convertible rupee ended at 62.2825/2925 per dollar, compared with Thursday's close of 62.365/375. It gained 0.6 per cent in the week, snapping two weeks of losses, to post its biggest gain since December 6.

The rupee is seen less vulnerable to emerging market selling after authorities slashed the current account deficit and raised currency reserves.

The strong response to the government's auction of mobile spectrum is also improving confidence about the fiscal deficit target. Flows have also helped the rupee.

The rupee on Friday benefited as dealers are also awaiting inflows from Vodafone Group Plc's $1.6 billion deal to buy out its minority partners in its Indian unit.

The government will also report factory output and industrial data next week. Reserve Bank of India governor Raghuram Rajan has said he will keep rates steady if inflation continues to ease as expected.

In the offshore non-deliverable forwards, the one-month contract was at 62.61, while the three-month was at 63.48.

Subhadip Sircar in Mumbai
Source:
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