Rupee might touch 62 this week

The rupee might weaken this week due to global uncertainties. The government bond market shall keep a close watch on the inflation numbers for July to be released this week. However, if the rupee weakens, it shall also have a negative impact on the bond market.

Currency dealers believe the rupee could even touch Rs 62 a dollar this week. "The trading range will be between Rs 61- Rs 62 this week," said Sandeep Gonsalves, forex consultant and dealer, Mecklai & Mecklai.

On Friday, the rupee ended at 61.15, compared to the previous close of 61.23. During intra-day trades, the rupee had touched a low of 61.74, close to a level last seen on March 5. The recovery in rupee was due to dollar sale by state-run banks and exporters.
 

Meanwhile, the yield on the 10-year government bonds climbed to as high as 8.68 per cent before ending at 8.64 per cent, changing little from the previous close.

"Tracking weakness in the rupee, the 10-year bond yields can even touch 8.70 per cent this week," said a bond trader with a private sector bank.

The Consumer Price Index inflation rose an annual 7.31 per cent in June - down almost a percentage point from 8.28 per cent in May.