Government bond yields are seen falling this week. This is because only one more auction is remaining for a notified amount of Rs 10,000 crore on Friday and a few traders predict it might get cancelled as government's cash balances are comfortable.
The yield on the 10-year benchmark government bond ended at 8.77 per cent on Friday, compared with its previous close of 8.82 per cent.
The rupee, on the other hand, might weaken further on concerns after the US Federal Reserve announced further tapering of $10 billion last month. Though the currency recovered due to dollar sale by state-run banks on behalf of the Reserve Bank of India, nervousness continues in the market.
"The rupee might trade in the range of 62 to 63 a dollar this week. The central bank might not allow the currency to breach the 63-a-dollar mark," said a currency dealer with a state-run bank.
It ended at 62.66 a dollar on Friday, compared with the previous close of 62.58. According to currency dealers RBI's intervention has been helping the rupee from further weakening.
