Govt bonds, ₹ fall on strong US data

Both government bonds and the rupee on Friday weakened sharply after recent data economy, even amid aggressive rate hikes by the US Federal Reserve.

- ANJALI KUMARI

The US gross domestic product (GDP) grew 2.4 per cent between April and June, exceeding expectations of an increase of around 1.8 per cent. This growth was spurred primarily by consumer expenditure and investment.

With the release of this data, the dollar index, which measures the strength of the US dollar against six major currencies, rose to 101.76 from 100.52 on Thursday. As a result, the rupee depreciated by 0.4 per cent, ending at 82.26 per US dollar, as opposed to 81.94 a dollar on Thursday.

Meanwhile, government bond yields increased marginally, with the benchmark yield reaching a more than three-month high. This was in line with the rise in US Treasury yields, according to dealers. After the initial increase, the benchmark yield fluctuated within a confined range of 7.16-7.18 per cent throughout the trading session.