Rupee opens higher at 65.95/$

The currency touched a high and low of 66.03 and 66.07 respectively.WPI inflation during October contracted by 3.81% on yoy basis, relatively less than the September WPI reading of ‐4.54%.

The Indian rupee opened higher by 5 paise at 65.95/$ in early trade on Tuesday. On macroeconomic side, India’s wholesale prices during October declined for the 12th consecutive months. In this respect, WPI inflation during October contracted by 3.81% on yoy basis, relatively less than the September WPI reading of ‐4.54%. Rise in food prices has moderated the contraction. Earlier, Indian government reported that consumer prices during October rose 5% on yoy basis after a 4.41% increase in September. Rising food prices (particularly pulses) and dilution of congenial base effect is leading to a spike in consumer price inflation.

On global macroeconomic front, a contrasting picture seems to be emerging on both sides of the Atlantic, wherein Fed is talking about a rate hike and ECB is contemplating at a prolonged accommodative stance. Markets to an extent may have factored in the probability of US hiking rates in December; however the moot point is whether Fed will adopt a long pause after the first move on the rates.

The rupee ended at 65.99, higher by 10 paise from its previous close of 66.09 on Friday. The currency touched a high and low of 66.03 and 66.07 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.16 and for Euro stood at 70.97 on November 16, 2015. While, the RBI’s reference rate for the Yen stood at 54.05, the reference rate for the Great Britain Pound (GBP) stood at 100.6563.