Rupee opens at a three-week high

Rupee

The Indian rupee opened at a three-week high against the US dollar tracking gains in Asian currencies. This is the fourth consecutive session when the home currency was trading higher.

At 9.10am, the domestic currency was trading at 81.98 a dollar, up 0.33 percent from its previous close of 82.25.

Asian currencies gained after the dollar index extended a decline of 0.1 percent after falling 1 percent, posting its biggest drop since January as easing inflation data prompted traders to pare expectations for the US Federal Reserve rate hikes this year.

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US inflation slipped to a more than two-year low. US CPI declined to 3 percent on a yearly basis in June from 4 percent in May. Further, the core CPI dropped to 4.8 percent from 5.3 percent.

Meanwhile, India's headline retail inflation rate snapped its four-month falling streak and rose to 4.81 percent in June from 4.31 percent in May, pushed by a rise in vegetable prices, fading away from the favourable base effect.

Traders pared their bets for a hike in November to about a 26 percent chance from 46 percent prior to the CPI release, according to data compiled by Bloomberg.

Traders are awaiting US Producer Price Index (PPI) for June and weekly jobless claims. Other significant economic indicators to be released today include UK GDP for May and Euro-zone industrial production for May.

Among Asian currencies, South Korean won gained 1.03 percent, Malaysian ringgit up 0.78 percent, Philippines peso climbed 0.68 percent, Indonesian rupiah rose 0.65 percent, Taiwan dollar 0.38 percent, Thai Baht 0.14 percent, Hong Kong dollar and Singapore dollar were up 0.05 percent.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 100.44, down 0.1 percent from its previous close of 100.52.