Indian rupee rises on first trading day of week

The Indian rupee rose on Monday, but higher near-maturity US Treasury yields were expected to limit the upside for the currency.

The rupee was at 22.509 against the UAE dirham by 9.05am UAE time, compared with 22.519 in the previous session. The domestic currency reached an intraday high of 22.488.

The two-year US Treasury yield climbed to 5.10 per cent, just two basis points shy of year-to-date highs. Federal Reserve Chair Jerome Powell reaffirmed on Friday that the central bank remains focused on hitting its 2 per cent inflation target, signalling rates will likely remain higher for longer.

Higher US yields will keep the dollar bid and the rupee is not likely to see much upside from here, traders said.

The rupee is expected to be in the 82.40-82.80 range against the dollar during the week, a foreign exchange trader at a state-run bank said.

"Possible equity flows (due to MSCI rebalancing) are likely to support the rupee."

Key U.S. economic data is due this week including core PCE inflation and non-farm payroll numbers. India's GDP print for the June quarter will be released on Thursday.

• UAE: Indian rupee soars against dirham, records highest single-day gain in 2 months

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