Rupee opens little changed against US dollar, bond yields fall

The rupee opened little changed but edged higher against the dollar in early trades on Wednesday, helped by a sluggish greenback and weak oil prices.

At 09:10 AM, the rupee was trading at 69.38 a dollar, up 6 paise from its Tuesday’s close of 69.44. The home currency opened at 69.44 and touched a high and a low of 69.37 and 69.45 a dollar, respectively.

In the currency market, the dollar traded near an 11-week low against its peers amid expectations the US Federal Reserve could cut interest rates some time in the next few months.

The dollar index versus a basket of six major currencies was flat at 96.698, trading just above the 96.459 level it hit on Monday, its lowest since March 25.

Investor focus is now on the Fed’s next policy meeting on June 18-19 and what kind of signals the central bank could offer on the direction of monetary policy, reported Reuters.

In commodity markets, oil prices declined, weighed down by a weaker oil demand outlook and a rise in US crude inventories.

Brent crude futures, the international benchmark for oil prices, were down 76 cents, or 1.22 percent, at $61.53 a barrel.

Foreign institutional investors (FIIs) remained net buyers in the capital markets, putting in Rs 95.79 crore Tuesday, provisional data showed.

In debt markets, the yields on the 10-year government bonds were up 0.31 percent to 7.02 percent from its previous close of 7.04 percent. Bond yields and prices move in opposite directions.