India’s rupee halted a six-day advance on speculation some investors judged the currency’s gains to be excessive.
The rupee dropped 0.4 percent to 67.3325 a dollar as of 11:57 a.m. in Mumbai, set for its biggest decline since Feb. 16, prices from local banks compiled by Bloomberg show. The dollar’s 14-day relative-strength index versus the rupee was at 33.6 on Friday, near the 30 level that indicates to some traders a reversal is likely. Indian markets were shut Monday for a local holiday.
“We saw an extended rally and some depreciation was required,” said Gaurav Sharma, a senior currency analyst at Religare Commodities Ltd. in Noida, near New Delhi. He predicts the rupee in a 67-67.50 a dollar range for the day.
The Indian currency jumped 2.4 percent in the last six days and rose to a seven-week high of 67.0850 on Friday as foreign funds boosted holdings of local stocks amid a revival in global sentiment for equities. The inflows followed Feb. 29 budget announcements by Finance Minister Arun Jaitley, including retaining the government’s goal of narrowing the fiscal deficit to a nine-year low and boosting spending on roads, ports, power plants and other public projects.
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Sovereign bonds rose, with the 10-year yield dropping one basis point to 7.62 percent, according to prices from the Reserve Bank of India’s trading system. It slipped 15 basis points last week. India plans to auction 46.81 billion rupees ($695 million) of government debt quotas to foreign investors after the close of markets.
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