Rupee closes marginally higher against US dollar

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The Indian rupee on June 7 ended marginally higher against the US dollar tracking gains in the Asian peers and local equity markets. The home currency opened at 82.56 a dollar and closed at 82.55 a dollar, up 0.07 percent from its previous close of 82.61.

Traders are eagerly awaiting the policy decision from the RBI, which is scheduled for June 8, the US inflation reading on June 13, and the Federal Reserve's policy review on June 14.

On the policy front, there is an 80-85% chance that RBI will keep the rates on hold, while there is an 80% chance of the US Fed pausing rates in June and a 52% chance of a hike in July, analysts said.

Asian currency analysis

Among Asian currencies, Japanese yen was up 0.24 percent, Philippines peso gained 0.24 percent, Malaysian ringgit 0.22 percent, Thai Baht 0.08 percent, and the Singapore dollar up 0.05 percent. Among the losers, South Korean won fell 0.44 percent, Indonesian rupiah down 0.12 percent, and Taiwan dollar 0.08 percent.

Meanwhile, the bond erased its gains and was trading flat after the Reserve Bank of India received bids far less than it aimed for at its two-day variable rate reverse repo auction held on Wednesday, even as the central bank doubled down on draining excess liquidity. It received offers worth only Rs 18.5 billion versus Rs 750 billion notified. Cutoff rate was 6.49%.

The 10-year bond yield was trading flat to 6.979 percent from its previous close of 6.978 percent. Both bond yield and prices moved in the opposite direction.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 104.05, down 0.07% from its previous close of 104.12.

(Bloomberg contributed this story)