The Indian rupee strengthened against the dollar in the mid day trading on Thursday amid caution ahead of the Union budget due on Saturday.Traders will also keep an eye on the annual economic outlook survey on Friday.

The local unit opened at 61.94 per dollar and touched a high of 61.83 per dollar, a level last seen on 6 February. At 2.54pm, the home currency was trading at 61.89, up 0.14% from previous close of 61.97.The Sensex index fell 0.63%, or 183 points, to 28,840.07 points.

The yield on India’s 10-year benchmark bond was trading at 7.729% compared with its Wednesday’s close of 7.707%. Bond yields and prices move in opposite directions.

Since the beginning of this year, the rupee has gained 1.78%, while foreign institutional investors have bought $3.42 billion from local equity and $5.05 billion from bond markets.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 94.257, up 0.05% from the previous close of 94.213.

The ratings agency S&P raised its India gross domestic product growth forecast to 7.9% from 6.2% for the year ending March 2016, citing as well rising investment and low oil prices. The agency also raised its growth forecast for fiscal year 2016-17 to 8.2% from 6.6% previously.

Source:livemint.com