By Nimesh Vora
MUMBAI, May 2 (Reuters) - The Indian rupee was trading
higher on Tuesday, supported by dollar inflows that helped it
overcome the dollar's strength against other Asian currencies.
The rupee , which resumed trading following the
extended weekend, was at 81.7600 per U.S. dollar by 11:02 a.m.
IST, up from 81.8250 in the previous session.
Foreign investors were net buyers of about $400 million
worth of Indian equities on Friday, according to preliminary
data from the BSE website. This was after investing about $430
million on Thursday.
The BSE Sensex on Tuesday reached its highest levels since
mid-February.
Most Asian currencies were trading lower tracking the
overnight uptick on the dollar index . The rise in U.S.
yields, following U.S. manufacturing and construction data,
supported the dollar versus its major peers.
The rupee is doing well thanks to the inflows and Indian
equities, a forex sales official at a private bank said. Whether
the 81.60 (support on USD/INR) will be taken out will depend on
what happens after the Federal Reserve meeting, he added.
The two-day Fed meeting will get underway later in the day,
following which the U.S. central bank is expected to raise rates
by 25 basis points. Economists at ING Bank reckon that this
could be the final rate hike.
"Inflation remains 'unacceptably high', but banking stresses
are leading to a tightening of lending conditions," James
Knightley, chief international economist at ING, said in a note.
"While the Fed will leave the door ajar for further hikes,
the need for higher policy rates is highly questionable."
Forex markets go into Wednesday’s Fed meeting wary of the
simmering U.S. bank crisis and U.S. debt ceiling negotiations,
ING noted.
(Reporting by Nimesh Vora; Editing by Janane Venkatraman)
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