Rupee scales near 3-wk high as Chinese yuan boosts Asian FX
By Anushka Trivedi
MUMBAI (Reuters) - The Indian rupee hit a near three-week high against the dollar on Wednesday after a stronger Chinese yuan sparked a rally in Asian currencies.
The rupee rose 0.20% to 82.50 per dollar, having strengthened up to 82.37 at one point, near its 55-day moving average of 82.3514 and at its highest level since Feb. 10.
There were a "decent" amount of inflows into the market, and the broader sentiment was better, while a pullback in the dollar index helped the rupee, said a dealer at a private bank.
Several traders pointed to the potential of MSCI-related inflows as well as the State Bank of India's $1 billion syndicated social loan announced on Tuesday.
"Near term prospects for the rupee are determined by flows and the central bank's actions which are acting in opposite directions," said Jayaram Krishnamurthy, founding partner and chief operating officer at Almus Risk Consulting.
Hence, the local unit is likely to stay in the range of 82.60-83.00 in the near term, Krishnamurthy said, noting that technically, only a break of either side on a daily close basis would trigger a directional move.
The Chinese yuan rallied to 6.8880 per dollar after data showed factory activity in February grew at its fastest pace since April 2012, spurring hopes of a rebound in the world's second biggest economy. [CNY/]
Asian currencies and equities rose in response, while the dollar index fell 0.5%. The Thai baht and the South Korean won led gains with a 1.3% jump.
Markets now look to U.S. ISM manufacturing data due later in the day, which will provide cues on whether the economic growth momentum persisted in February and on the interest rate hike path there.
(Reporting by Anushka Trivedi; Editing by Dhanya Ann Thoppil)