On Monday, the Indian rupee strengthened against the dollar as a result of the dollar’s difficulties and a positive risk tone in Asia.
The rupee was trading at 82.14 by 0454 GMT, compared with 82.44 in the previous session. The local unit has traded in an about 82.11 to 82.25 range, Reuters reported.
Asian shares were higher, while currencies, except for the Chinese yuan, rose.
The fact that the unemployment rate increased as a result of the U.S. jobs report boosted demand for Asian assets. However, the headline job additions that outperformed forecasts and the higher-than-expected pay increase were bad for Asian currencies.
The amount of new jobs had no effect on U.S. yields or the likelihood that the Federal Reserve will raise rates by 50 or 75 basis points next month. In contrast, the dollar fell versus its major rivals while Wall Street rose.
“In aggregate, it (the report) suggests the labour market remains fairly robust and it keeps alive the possibility of a fifth 75bp hike,” ING Bank said in a note.
“Remember though that we do have another jobs report and two more CPI (consumer price index) reports before the Dec. 14 Fed decision.”
The October inflation report is due this Thursday.
Rupee forward premiums were somewhat higher as the anticipated yield for one year crept up to 2.26%. Indian stocks increased somewhat but were still significantly below their day’s highs. On worries about Chinese demand, oil prices declined.
Traders reckon it will be quiet day for rupee from here, expecting the currency to broadly be within the range it has dealt so far.
