By Jaspreet Kalra
MUMBAI, Nov 4 (Reuters) – The Indian rupee rose to its strongest level in nearly two weeks on Wednesday, as early results from US midterm elections weighed on the dollar, while data also pointed to a nascent revival in foreign investors buying local stocks.
The rupee touched 94.51 in early trade before trimming gains to last quote at 94.63 per dollar, up 0.1% on the day.
The dollar fell sharply against major currencies on Wednesday as Democrats made strong gains in their attempt to wrest control of Congress from President Donald Trump’s Republicans.
Democrats captured majorities in both the Senate and House on Tuesday, scoring sweeping victories that reached deep into Republican strongholds as tens of millions of voters delivered a scathing rebuke to President Donald Trump.
“A Democratic sweep of both the House and Senate would likely be modestly positive for Asian FX, as stronger fiscal gridlock would reduce expectations for further US fiscal expansion, weighing on US yields and the USD,” MUFG said in a note.
The greenback was down 0.3% against a basket of six major peers, lifting most Asian currencies between 0.1% and 0.3%.
The prospect of tougher oversight of AI-linked data centres, though, drove regional stocks lower.
Equities in South Korea and Taiwan were down 1.5% to 2%. Indian stocks, meanwhile, posted modest gains to rank among regional outperformers alongside Vietnamese stocks.
A dip in oil prices on Wednesday also helped the rupee, even as traders pointed to importer appetite for dollars at more favourable rupee levels that limited the currency’s immediate gains. [O/R]
Early signs of a turnaround in foreign portfolio flows also aided sentiment on the rupee. Overseas investors bought roughly $1 billion of Indian equities in November to date, following back-to-back months of selling, per stock depository data.
(Reporting by Jaspreet Kalra; Editing by Rashmi Aich and Harikrishnan Nair)
Comments