MUMBAI, March 6 (Reuters) - The Indian rupee reached its
highest level versus the dollar on Monday, helped by the
pullback on Treasury yields and the positive risk mood.
The rupee was at 81.8075 to the dollar at 11:02
a.m. IST, up from 81.9650 in the previous session. It managed to
climb to 81.7275, the highest level in more than a month.
Importers are advised to participate at near to the 81.70
level to hedge their dollar payments, said Amit Pabari, managing
director at CR Forex.
Exporters who are under hedged should wait for USD/INR to
reach to around 82.20 levels, Pabari added.
The rupee managed to move outside of its narrow 82.40-83.00
range last week, climbing above the 82 levels on the back of
one-off dollar inflows. The rupee's rally was not entirely
unexpected, considering its past behaviour and the Reserve Bank
of India's defence of the 83 level, analysts said.
"USD/INR has always been peculiar. The narrower it trades
for a longer time period, the more certainty of a 1 rupee move,"
Kunal Sodhani, vice president at Shinhan Bank, said.
"That's exactly what happened. 83.00 levels seemed to be
defended by RBI and later rupee appreciation was backed by
foreign funds flow."
The rupee and other Asian currencies were helped on Monday
by the pullback in U.S. yields. The 10-year Treasury yield was
back below 4% and the 2-year was ten basis points off its recent
highs.
That helped lift the risk sentiment with Asian equity gauges
opening the week on a positive note.
Investors will be looking out for two key developments this
week for cues on U.S. rates - Federal Reserve Chair Jerome
Powell's testimony to lawmakers on Tuesday and Wednesday and the
U.S. jobs report on Friday.
The previous jobs report had teed off the current
reassessment of the peak Fed funds rate.
(Reporting by Nimesh Vora; Editing by Varun H K)
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