The rupee might weaken at the start of this week as the dollar is expected to gain on the back of US Labor Department's announcement that non-farm jobs increased by 175,000 in February. This raises hope that the Federal Reserve will continue to its pare monetary stimulus.
On Friday, the rupee ended at a three-month high of 61.09 to a dollar, compared with the previous close of 61.12. The rupee had ended at 61.04 on December 10, 2013. The rupee had opened at 61.02 and, during intra-day trades, it touched a high of 60.95, a level close to August 8, 2013 when it had closed at 60.86.
Some currency dealers believe the rupee would eventually appreciate during the week as inflows from foreign institutional investors (FIIs) could continue in domestic markets. This week, the rupee is expected to trade in the range of 61.80-60.70. Meanwhile, government bond yields are likely to fall from the current levels due to softer inflation numbers for February, to be released this week.
Wholesale price index (WPI) as well as consumer price index (CPI) inflation for February will be released this week. According Shubhada Rao, chief economist at YES Bank, the WPI inflation print could be at 4.74 per cent, while the CPI inflation for February could be 7.95 per cent.
The yield on the 10-year benchmark government bond 8.83 per cent 2023 is seen trading in the range of 8.75 per cent to 8.80 per cent. The yield had ended at 8.81 per cent on Friday, compared to the previous close of 8.79 per cent.
