Rupee opens at 1-week high, rises 11 paise to 66.62/$

Moneycontrol Bureau

The Indian rupee has opened at 1-week high on Thursday due to weakness in dollar after Federal Reserve hiked interest rates by 25 basis points (the first rate hike in last nine years).The currency rose 11 paise to 66.62 a dollar compared to 66.73 per dollar in previous session.Mohan Shenoi, Kotak Mahindra Bank says as widely expected, Federal Reserve raised rates by 25 basis points with dovish commentary signalling pace of hikes to be gradual and inflation dependent. Since the Fed hike was priced in, the dollar saw a mild rally against major currencies, he adds.According to him, with the uncertainty gone, EM equities and currencies are expected to rally today. He expects the USD-INR pair to trade today in a range of Rs 66.35-66.70/USD.

On bond market, Shenoi says the bond market is expected to rally on the back of rupee appreciation and absence of scheduled auctions in the rest of December.He expects the 10-year benchmark yield to trade today in a range of 7.68-7.73 percent.