Weakening sentiment of the dollar helped gains in the rupee, but nervousness related to tariffs is widespread in the markets, traders said. The dollar index touched a three-week low amid fear of an upcoming recession in the US, according to Reuters.
“There is nervousness in the market about how things will pan out in terms of tariffs. For now, importers are hedging their positions as rupee strengthens, while exporters are still on the sidelines,” said Ritesh Bhansali, Deputy CEO at Mecklai Financial Services.
Traders expect the rupee to continue with a depreciating bias and expect the rupee to be in the range of 86.50/$1 to 85.80/$1 in the coming week.
Meanwhile, yields of the 10 year benchmark bond softened to 6.42%, before closing at 6.44%, CCIL data showed. The 10 year yield had closed at 6.48% the previous day.
“Yields had softened, but supply from the auction today made yields go back up,” a bond trader with a primary dealership said. The RBI conducted two auctions worth Rs 16,000 crore for 15 year and 40 year tenures.Bond market participants are not overly worried about the sharp swings in yields of US treasury bills and will focus more on domestic events after a dovish policy by the Reserve Bank and commitment to surplus liquidity, traders said.
