Rupee trades higher against US dollar

NEW DELHI: The rupee strengthened 26 paise to 65.70 against the US dollar in early trade on Wednesday.

The domestic currency had appreciated against the greenback in the previous session after the Reserve Bank of India (RBI), in a surprise move, cut the short-term borrowing rate, or repo rate, by 50 basis points in its policy review to 6.75 per cent on Tuesday.

Persistent dollar selling banks and exporters further boosted rupee as the local currency ended up rising 9 paise to close at 65.96 on Tuesday.

All eyes would now be on the US nonfarm payrolls numbers for September, which is scheduled for release on Friday.

The market would also take cues from the US Fed Chairwoman Janet Yellen's speech at the St Louis Fed community banking research and policy conference on Wednesday.

Further cues would be offered Stanley Fischer, vice-chairman, at the US apex bank, who will deliver a speech at the Boston Fed.

After remaining status quo on interest rate in the recent policy review, the US Fed Chair last week indicated that the first rate hike since 2006 is still on cards and it could likely come in 2015 itself — either in October or December policy meet.

Dollar has weakened a bit post the recent policy review. But any further clarity by Yellen on the rate hike may lift the US currency again. The dollar index, which tracks dollar movement against a basket of six major world currencies, stood at 95.89, up 0.04 per cent.