MUMBAI, Feb 2 (Reuters) – The Indian rupee strengthened on Friday, aided by gains in its Asian peers and positive sentiment following the presentation of the domestic budget.
The rupee was at 82.87 against the U.S. dollar as of 10:25 a.m. IST, higher by 0.11%, compared to its close at 82.9650 in the previous session.
The dollar index was little changed at 103 after falling nearly 0.5% on Thursday, weighed down by a dip in U.S. treasury yields. Most Asian currencies advanced, led by the Indonesian rupiah, which was up 0.6%.
The 10-year U.S. treasury yield was last quoted slightly higher at 3.89% in Asia hours after falling 10 basis points (bps) on Thursday.
The rupee’s gains on Friday were aided by broad-based dollar sales, a foreign exchange trader at a private bank said.
The “double bonanza,” of a drop in U.S. yields and positive sentiment following the presentation of India’s budget on Thursday is likely to support further appreciation in the local unit, the trader added.
The dollar-rupee pair is likely to trade with a “sell on upticks” bias on Friday, said Apurva Swarup, vice president at Shinhan Bank India.
Meanwhile, rupee forward premiums fell, with the 1-year implied yield falling 3 bps to 1.82%.
Investors will now be keeping a keen eye on the U.S. non-farm payrolls data, due later on Friday.
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Reporting by Jaspreet Kalra; Editing by Sonia Cheema
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