Rupee sinks to near 8-wk low on higher US yields, dollar


MUMBAI: The Indian rupee fell slightly to a near eight-week low on Thursday on higher US bond yields and a firmer currency dollar as risk sentiment improved on hopes of an early deal on the debt ceiling.
The rupee fell to 82.4750 against the US dollar from its previous close of 82.38. It hit its lowest level since March 24 at 82.4825.
“The recent US dollar breakout is giving USD/INR directional movement and oil prices have also rallied, increasing pressure on the rupee,” said Anand James, chief market strategist at Geojit Financial Services.
“The rupee is moving into a consolidation zone after recent weakness,” added James.
Meanwhile, US Treasury yields rose overnight and the dollar index rose to more than seven-week highs on positive signals on the debt ceiling negotiations and positive housing data.
April housing starts data showed a surprise month-on-month increase of 2.2%.
“At 1.40 million, annual housing starts is in the middle of the range of 1.34 to 1.4 million for the past seven months, suggesting a high level of resilience in the construction sector,” analysts at ANZ wrote in a notice to customers.
Asian stocks rose against their US peers while currencies were mixed.
The offshore yuan further weakened to 7.0286 against the dollar on Thursday, weighed down by this week’s weak economic data.

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