The rupee closed at 83.53/$1 on Friday, compared with 83.56/$1 on Thursday, Reuters data showed.
The dollar index strengthened modestly to 104.39 on Friday after hitting a one-month low of 104.07 on Thursday, according to Reuters. US inflation fell faster than forecast to 3% in June.
Expectations for a September rate cut by the US Federal Reserve rose to 90% after the release of US inflation data, according to CME’s FedWatch tool.
Traders are expecting a wider range of 83.30 to 83.60 against the US dollar in the rupee’s movement. Bond and rupee traders avoided big bets ahead of Indian inflation data released after market hours on Friday.
Yields on benchmark 10-year government securities remained flat. According to CCIL, the yield closed at 6.98% today, unchanged from the previous day.
“Yes the 10-year G-Sec ended flat but gave up its gains during the day due to tightening in US yields and RBI’s comments yesterday”, said a bond trader at a public sector bank.
Reserve Bank of India (RBI) Governor Shaktikanta Das said on Thursday that with retail inflation still above the 4% target, any talks on cutting interest rates would be too premature.
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