Experts believe dollar may continue to appreciate due to an increase in US economic growth
The rupee is expected to weaken this week as experts believe the dollar might continue to appreciate due to an increase in US economic growth. There are concerns in the currency market that the US Fed might start hiking interest rates sooner.
Data from last month showed the US economy expanded at a 4.6 per cent annualised rate in the second quarter, the fastest pace since 2011.
“The bias is towards the rupee weakening. The range for this week is 61-62. The rupee may near 62 but may not touch it. This is because the central bank may intervene and save the rupee,” said the head of treasury of a state-run bank.
The rupee ended at 61.61 on Wednesday compared with the previous close of 61.76 a dollar. The market was shut on Thursday and Friday.
Government bond yields, on the other hand, are seen trading range-bound this week. “The yield on the 10-year bond may continue to be stable in the range of 8.45-8.50 per cent,” said a bond trader with a state-run bank.
The 10-year bond yield ended at 8.48 per cent on Wednesday, compared with the previous close of 8.51 per cent. Meanwhile, the government borrowing programme for the second half of the financial year shall begin this week.
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