The rupee reached its highest level versus the dollar on Monday, helped by the pullback on Treasury yields and the positive risk mood.

The rupee was at 81.8075 to the dollar at 11:02 a.m. IST, up from 81.9650 in the previous session. It managed to climb to 81.7275, the highest level in more than a month.

Importers are advised to participate at near to the 81.70 level to hedge their dollar payments, said Amit Pabari, Managing Director, CR Forex.

Exporters who are under hedged should wait for USD/INR to reach to around 82.20 levels, Pabari added.

Also read: Global 360: Can rupee strengthen further?

The rupee managed to move outside of its narrow 82.40-83.00 range last week, climbing above the 82 level on the back of one-off dollar inflows. The rupee's rally was not entirely unexpected, considering its past behaviour and the Reserve Bank of India's defence of the 83 level, analysts said.

"USD/INR has always been peculiar. The narrower it trades for a longer time period, the more certainty of a 1 rupee move," Kunal Sodhani, Vice President at Shinhan Bank, said.

"That's exactly what happened. 83.00 levels seemed to be defended by RBI and later, rupee appreciation was backed by foreign funds flow."

The rupee and other Asian currencies were helped on Monday by the pullback in U.S. yields. The 10-year Treasury yield was back below 4% and the 2-year was ten basis points off its recent highs.

Also read: EEPC talking to SBER Bank of Russia to facilitate rupee trade 

That helped lift the risk sentiment with Asian equity gauges opening the week on a positive note.

Investors will be looking out for two key developments this week for cues on U.S. rates - Federal Reserve Chair Jerome Powell's testimony to lawmakers on Tuesday and Wednesday and the U.S. jobs report on Friday.

The previous jobs report had teed off the current reassessment of the peak Fed funds rate.

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