India’s rupee completed its biggest weekly decline since August on speculation an improving U.S. economy will strengthen the dollar and damp demand for emerging-market assets.
U.S. retail sales climbed the most in eight months in November, data showed yesterday, adding to signs of a pickup in the world’s largest economy as the Federal Reserve considers its first interest-rate increase since 2006. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major currencies, rose 0.6 percent yesterday, the most in almost a week. Indian sovereign bonds capped a fourth weekly gain.
“The revival in the U.S. economy should further strengthen the dollar,” said Ankur Jhaveri, co-head of currency and rates at Edelweiss Financial Services Ltd. in Mumbai. “Year-end and quarter-end dollar demand is expected to put pressure on the rupee going forward.”
The rupee weakened 0.8 percent from Dec. 5 to close at 62.30 a dollar in Mumbai. The currency touched 62.5038 earlier, the lowest level since Feb. 6. Its weekly drop is the biggest since the five days ended Aug. 1. It rose 0.1 percent today.
Three-month offshore non-deliverable forwards fell 0.7 percent from Dec. 5 to 63.19 a dollar, data compiled by Bloomberg show. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars. They gained less than 0.1 percent today.
via Bloomberg
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Alfonso Esparza