Rupee rises to highest level helped by dollar sales: Mangal Keshav

Indian rupee rose to its highest level in more than a week, after gaining for a third consecutive session on Friday, helped by dollar sales from custodian banks and gains in the euro. India's industrial output data is expected on Tuesday and inflation data on Thursday, as the reports will come ahead of the Reserve Bank of India's policy review on March 19.

The partially convertible rupee closed at 54.285/295 per dollar versus its previous close of 54.56/57. The rupee rose to as high as 54.27 during the day, its highest since February 28.

In the offshore non-deliverable forwards, the one-month contract was at 54.69 while the three-month was at 55.3.

India's benchmark 10-year bond yield were down 2bps at 7.84%, after a report indicated the government borrowing in first-half of the fiscal year may be lower than expected, with growing
hopes of a rate cut by the central bank at its upcoming policy review.

The one-year rate was down 3bps at 7.55% while the five-year OIS rate was 1bp higher at     7.22%. India's three-day cash rate was at 7.7/7.8% from 7.8/7.85% at Thursday's close.

The dollar index, which measures the greenback against a basket of six major rivals, jumped to 82.9 after the data, up from 82.09 in late North American trading on Thursday and closed Friday’s session around 82.75.

The euro fell against the dollar to its lowest since mid-December, after a report showed US employers stepped up hiring in February, suggesting the economy has enough momentum to withstand the blow from higher taxes and deep government spending cuts while a downgrade of Italy added more pressure.

Fitch has cut Italy's long-term foreign currency issuer default rating to 'BBB+' from 'A-' with a negative outlook, citing political uncertainty.

Spanish bond yields fell to their lowest in over a year on Friday, after a strong debt sale by Madrid the previous day showed the country was suffering little from Italy's political instability.

The Swiss central bank has spent 188bn francs ($199bn) in 2012, nearly a third of Switzerland's annual output, to enforce the cap on its currency to protect the economy. It bought foreign currencies from a wide range of counterparties in Switzerland and abroad, the Zurich-based central bank said in its Accountability Report.