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USD/INR eases after record high close as US yields drop

After closing at a record low level of 83.1475 per dollar on Thursday, India’s Rupee was slightly firmer on Friday as the US Dollar and US Treasury yields retreated from recent highs.

India’s currency has faced considerable selling pressure in recent trading sessions, which prompted the Reserve Bank of India to step in, selling US Dollars, to curb Rupee depreciation.

As the Rupee retreated beyond the 83 per dollar mark, both importers and exporters looked to hedge positions.

“Importers and exporters who were on the sidelines have come back to the market post-83. Panic buying from importers is only likely to come in after 83.50,” Abhishek Goenka, founder and Chief Executive Officer of IFA Global, was quoted as saying by Reuters.

The US Dollar Index came off a two-month peak of 103.598 registered on Thursday and was last down 0.07% on the day to 103.365.

Meanwhile, the yield on US 10-year Treasury Notes surged to a 10-month high of 4.32% on Thursday and was last at 4.25%.

Recent macro data out of the US indicated economy remained resilient and this would likely keep underpinning Treasury yields.

As of 7:36 GMT on Friday USD/INR was inching down 0.08% to trade at 83.0610.

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