Indian Rupee Strengthens as US Treasury Yields Fall

The Indian rupee strengthened on Monday, supported by a decline in US treasury yields and a weakening US dollar. 

The rupee was trading at 83.1850 against the US dollar, compared to its previous close at 83.2850.

Asian Currencies on the Rise:

Asian currencies, including the Malaysian ringgit and Korean won, experienced significant gains. 

However, the rupee lagged behind due to persistent US dollar demand from importers.

US treasury yields saw a decline, particularly after data released on Friday indicated a cooling labor market in the United States. 

The 10-year US treasury yield stood at 4.57%, well below the multi-year peak above 5% seen the previous month.

Reduced Odds of Fed Rate Hike:

The likelihood of a Federal Reserve rate hike at the December meeting dropped to just 7%, down from 20% a week earlier, signaling a change in expectations.

While the developments are viewed as slightly positive for the rupee, foreign fund outflows and ongoing range-bound trading are expected to influence the local unit’s performance.

Awaited Comments from Fed Officials:

Investors will be closely monitoring comments from Federal Reserve officials in the coming week, as economic data releases are relatively light. 

The rupee’s movement in the near future will be closely watched for potential breaks from its current trading range.