Rupee to move towards 64.5-65.50 against USD, bond yields to trade between 7.15-7.3%: Trithankar Patnaik

Trithankar Patnaik of Mizuho Bank expects the rupee to reverse the current trend of appreciation against the dollar and head back to 64.50 to 65.50 levels in the next quarter.

With the impending changes in the US tax laws finally driving a rise at the long-end of the curve there, and the ECB also getting to the end of its quantitative easing program, we see global interest rates gradually reflecting growth optimism, improving inflation, and hawkish Central Bank commentary, he said.

On the bonds, Trithankar Patnaik added that a confluence of continued oversupply in the bond markets, rising inflation trajectory and a potential bottoming out of the macro stability seen in the last two years are likely to keep yields close to the top-end of their range of 7.15 to 7.3 percent in the near term.