Rupee seen appreciating after strong GDP data

The rupee is expected to strengthen this week on the back of strong gross domestic product (GDP) data, which is set to attract foreign flows in domestic markets.

Friday's GDP data showed that growth accelerated to the fastest pace in more than two years. GDP growth rose 5.7 per cent in the quarter ended June from a year earlier, the biggest gain since the quarter through March 2012 and compared with the 4.6 per cent in the previous quarter, said the Central Statistical Office.

"The GDP numbers are certainly positive for the rupee and the rupee is seen trading in a range of 60.30 to 60.80. If the rupee appreciates over the 60.30 mark then it can even touch 60 to a dollar. But beyond that the Reserve Bank of India may not allow the rupee to appreciate," said a senior currency dealer with a state-run bank.

The rupee had ended at 60.52 on Thursday compared with the previous close of 60.45 a dollar.

Government bond yields are seen tracking the movement in the rupee and the bias is towards yields falling. "The yield on the 10-year bond may trade in the range of 8.52 to 8.57 per cent this week," said the head of treasury of a public sector bank.

The yield on the 10-year bond ended stable at 8.56 per cent on Thursday. On Friday, the bond as well as currency markets were closed on the occasion of Ganesh Chaturthi.