India’s rupee rose the most in more than a week after U.S. jobs data beat economists’ forecasts in July, helping boost sentiment for emerging-market assets.
Employment in the world’s largest economy increased 163,000, exceeding the median estimate for a 100,000 gain in a Bloomberg News survey, a government report showed Aug. 3. Appreciation in the rupee will be limited by concerns about India’s growth and inflation, according to Alpari Financial Services India Ltd.
“The sharp rise in the U.S. nonfarm payrolls number has boosted risk-on trade,” Pramit Brahmbhatt, Mumbai-based chief executive officer at the Indian unit of Alpari Financial Services Ltd., wrote in an e-mailed response to questions today. “Weak domestic fundamentals shall limit the rupee’s gains.”
The currency rose 0.9 percent to 55.2575 per dollar as of 9:38 a.m. in Mumbai, the biggest advance since July 26, according to data compiled by Bloomberg. It touched 55.2350 earlier, the strongest level since July 30. One-month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 11.30 percent.
The Reserve Bank of India kept its benchmark repurchase rate at 8 percent on July 31. It raised the inflation forecast for the year through March 2013 to 7 percent from 6.5 percent and lowered the economic growth estimate to 6.5 percent from 7.3 percent. The People’s Bank of China said on its website yesterday it will increase the intensity of policy fine-tuning and continue exchange-rate reforms.
Three-month onshore rupee forwards traded at 56.30 per dollar, compared with 56.76 on Aug. 3, and offshore non- deliverable contracts were at 56.31 from 56.77. Forwards are agreements to buy or sell assets at a set price and date. Non- deliverable contracts are settled in dollars.
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