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The rupee opened at Rs 56.73 on Friday. During intra-day trades, it touched a high of Rs 56.69 and a low of Rs 57.13 before closing at Rs 57.07. It had closed at Rs 56.85 on Thursday.
The rupee is now not very far from its all-time low of Rs 57.33 hit onJune 22 last year. “The rupee is expected to trade in the range of Rs 56.50 and 57.50 per dollar this week and the bias is towards weakening,” said Sandeep Gonsalves, forex consultant and dealer, Mecklai & Mecklai.
Foreign institutional investors (FIIs) are pulling out from the domestic markets, which is also adding pressure to the rupee.
Government bond yields are expected to fall from current levels this week. The yield on the 10-year benchmark government bond 7.16 per cent 2023 ended at 7.24 per cent on Friday compared with the previous close of 7.21 per cent. Yields rose on Friday as a falling rupee and continued guard from the RBI governor D Subbarao on inflation hampered hopes of a rate cut at the June mid-quarter monetary review.
“The yield on the 7.16 per cent 2023 government bond is expected to trade in the range of 7.15-7.25 per cent this week,” said S Srinivasaraghavan, executive vice president and head-treasury of Dhanlaxmi Bank.
According to Srinivasaraghavan, the index of industrial production (IIP) data for April will be lower and the wholesale price index (WPI) inflation data for May will be softer due to which yields will fall further. The IIP as well as WPI data will be released this week.
