A customer hands Indian currency notes to an attendant at a fuel station in Mumbai, India, August 13, 2018. REUTERS/Francis Mascarenhas/File Photo Acquire Licensing Rights
MUMBAI, Nov 16 (Reuters) – The Indian rupee weakened on Thursday tracking its Asian peers lower but U.S. dollar sales from state-run banks, likely on behalf of clients, limited the downside for the local unit.
The rupee was at 83.2125 against the U.S. dollar as of 10:50 a.m. IST, compared with its close at 83.1425 in the previous session.
The rupee had logged its best day in nearly two months on Wednesday.
Asian currencies fell, with the Malaysian ringgit leading losses down by 0.8%. The dollar index was higher at 104.48, drawing support from better-than-expected retail sales numbers in the United States.
U.S. retail sales fell 0.1% month-on-month in October compared with an expected 0.3%, according to a Reuters poll. Further, data for September was revised to show sales increasing 0.9% from the previous 0.7%.
The 10-year U.S. treasury yield also reclaimed the 4.5% handle after having receded lower on bets that the Federal Reserve would begin easing policy rates next year.
“While the rupee volatility has increased since last Friday, it remains within a range of 83 to 83.30,” Amit Pabari, managing director at FX advisory firm CR Forex, said.
The domestic currency had plunged to its lifetime low of 83.42 on Friday.
Dollar sales from state-run banks on Thursday, likely on behalf of clients, helped limit the rupee’s losses, a foreign exchange trader at a bank said.
The rupee has “returned to its range and that is likely to keep holding”, the trader added.
Investors now await U.S. initial jobless claims data for the preceding week due later in the day. The data is expected to show that jobless claims rose slightly to 220,000, according to a Reuters poll.
Reporting by Jaspreet Kalra; Editing by Sohini Goswami
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