MUMBAI, Aug 2 (Reuters) – The Indian rupee was nearly flat on Friday as likely intervention from the Reserve Bank of India helped the currency hold above its all-time low amid pressure from weakness in local equities, which declined tracking a sell-off in global peers.
The rupee was at 83.7225 against the U.S. dollar as of 10:35 a.m. IST, nearly unchanged from its close at 83.7175 on Thursday.
U.S. stock futures also extended their declines, with Nasdaq futures down 1.3% while S&P 500 futures fell by 0.7%.
Dollar bids from at least two large U.S.-based foreign banks, likely on behalf of custodial clients, pressured the rupee in early trading, a foreign exchange trader at a private bank said.
The 10-year U.S. Treasury yield hit a six-month low of 3.94% in Asia trading while the dollar index was at 104.3. Asian currencies were mostly up by 0.1% to 0.8%.
“A return to broad-based USD weakness is still possible this month… but the (the dollar index) still needs to break below 104 first,” DBS Bank said in a note.
Meanwhile, dollar-rupee forward premiums rose with the 1-year implied yield up 4 basis points at 1.91%, its highest level in six months, lifted by the decline in US bond yields.
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Reporting by Jaspreet Kalra; Editing by Janane Venkatraman
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