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The rupee is seen strengthening this week, while government bond yields are expected to fall. According to currency dealers, flow from foreign institutional investors seen continuing as the holiday season gets over.
The currency ended at 62.16/$ on Friday, compared with its previous close of 62.27. It ended stronger due to dollar sales by foreign banks and public sector banks on Friday. The rupee had opened at 62.36 and during intra-day trade, touched a high of 62.15 a dollar.
"The rupee might trade in a range of 61.75 to 62.50 this week. This bias is more towards strengthening," said a currency dealer with a public sector bank (PSB).
Meanwhile, government bond yields are seen falling from current levels, as the Street expects December inflation numbers to be softer. The yield on the 10-year benchmark government bond 8.83 per cent ended at 8.83 per cent on Friday, compared with the previous close of 8.84 per cent.
"Yields may move further down, as rate rise concerns are seen diminishing with drop in inflation," said a government bond dealer, with a PSB.
The consumer price index (CPI)-based inflation number rose to 11.24 per cent in November, compared with 10.17 per cent the previous month. The wholesale price index (WPI)-based inflation data for November also rose to 7.52 per cent, compared with October's seven per cent. December CPI and WPI inflation data will be released later this month.
