India’s rupee rose the most in almost three months after a weak U.S. jobs report spurred speculation the Federal Reserve will keep interest rates unchanged for longer.
The Bloomberg Dollar Spot Index, which tracks the greenback against major peers, extended declines after data Friday showed American employers in March added the least number of jobs in more than a year. Low U.S. rates support demand for emerging-market assets, and global funds have poured $12.7 billion into India debt and stocks this year. Sovereign bonds rallied before the Reserve Bank of India reviews monetary policy Tuesday.
“The dollar has taken a beating globally,” said Navin Raghuvanshi, a currency trader at DCB Bank Ltd. in Mumbai. “The disappointing jobs data has clouded the prospect of an early increase in interest rates in the U.S.”
The rupee climbed 0.5 percent from March 31 to close at 62.18 a dollar in Mumbai Monday, according to prices from local banks compiled by Bloomberg. That’s the biggest increase since Jan. 9. The currency has risen 1.4 percent in 2015. Local debt and currency markets were shut April 1-3.
Government bonds advanced for the fourth day. While 33 of 42 economists surveyed by Bloomberg expect the RBI to leave the benchmark repurchase rate unchanged at 7.50 percent, nine expect a cut to 7.25 percent, adding to similar reductions in January and March.
The yield on the rupee bonds due July 2024 fell two basis points, or 0.02 percentage point, to 7.72 percent, according to prices from the central bank’s trading system.