Rupee opens lower at 71.34 a dollar, bond yields fall

The rupee opened lower against the US dollar on Thursday on the back of strength in the greenback. At 09:06 AM, the rupee was trading at 71.32 a dollar, down 8 paise from its Wednesday’s close of 71.24. The home currency opened at 71.34 and touched a high and a low of 71.31 and 71.37 a dollar, respectively.

In the currency market, the dollar rallied after the US Federal Reserve cut rates by 25 basis points, as expected, but its chairman signaled a higher bar for future rate cuts.

The greenback touched a seven-week high of 108.47 against the Japanese yen JPY= and stood just below that in Asian morning trade.

The US central bank, on a 7-3 vote, lowered the Fed funds target rate on Wednesday to a range of 1.75% to 2.00% “in light of the implications of global developments for the economic outlook.”

In the commodity markets, oil prices edged higher, with markets soothed by Saudi Arabia’s pledge to restore full production by end-September.

International Brent crude futures rose 8 cents to $63.68 a barrel by 0139 GMT while US West Texas Intermediate (WTI) crude was up 12 cents to $58.23 a barrel.

Foreign investors continued with their equity selling spree in the Indian market. Foreign institutional investors (FIIs) offloaded equities worth a net Rs 959.09 crore on Wednesday, provisional exchange data showed.

In debt markets, the yields on the 10-year government bonds declined 0.36 percent at 6.60 percent from the previous close of 6.62 percent. Bond yields and prices move in opposite directions.