The Indian rupee touched its highest level in nine months as market speculated that the main opposition Bharatiya Janata Party will win the national election today.
The rupee surged 0.6 percent to 59.6950 a dollar as of 10:04 a.m. local time. It also hit 59.5175, the highest point since the end of July last year. The currency has appreciated 3.5 percent so far in 2014.
The exit-poll results of the elections, which started on April 7, will be announced before 6:30 p.m. local time. However, official figures will be released on May 16. The opposition is expected to win the polls as voters look to mete out their revenge on the incumbent Congress party whose reign has been marred with corruption and sluggish economic growth.
“Anticipation that exit poll outcomes will be as per opinion polls is aiding the rupee’s appreciation,” Naveen Raghuvanshi, a Mumbai-based currency trader at DCB Bank Ltd told Bloomberg. “It is closely following the local stock indexes.
India’s factory output shrank 1.5 percent in March from a year ago, which was in line with the economists’ estimates in a Bloomberg poll. For the full-year ended March, industrial output shrunk 0.1 percent, down from 1.1 percent growth a year earlier.
Consumer inflation surged for the second consecutive month, rising to 8.59 percent in April from March’s 8.31 percent rally. It also exceeded slightly the economists’ prediction of an expansion of 8.5 percent.
The rupee’s one-month implied volatility, which measures the expected fluctuations in the exchange rate that is used to assign prices to options, rose 0.43 percentage point, or 43 basis points, to 11.64 percent. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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