MUMBAI: The Indian rupee is set to rise at open on Friday on the back of a rally in the Chinese yuan following steps by the country’s central bank and on robust domestic June-quarter growth.

Non-deliverable forwards indicate the rupee will open at around 82.60-82.62 to the U.S. dollar compared with 82.7850 in the previous session.

The rupee in each session this week has opened higher but has been unable to sustain it. A similar outcome is expected on Friday.

The rupee is likely to weaken during the day, a foreign exchange trader at a state-run bank said.

“Expect it to be range-bound till… a major event pushes it beyond 83.”

The offshore yuan climbed to a high of 7.2392 to the dollar after China’s central bank said it would cut the level of foreign exchange reserves that financial institutions must hold, a step directed towards slowing the pace of the recent yuan depreciation.

Indian rupee to rise as dollar extends losses on US GDP growth revision

The offshore yuan around mid-August had dropped to 7.35. China’s factory activity surprisingly returned to expansion in August, further contributing to the yuan’s move higher.

Meanwhile, data out on Thursday showed that India’s economy grew 7.8% in the April-June quarter year-on-year, a tad better than what economists polled by Reuters had forecast.

“The GDP data for Q2 confirms a resilient first half of the year for India’s economy in the face of the RBI’s policy tightening,” Capital Economics said in a note.

“More timely data point to a slight cooling in growth but India will remain an outperformer.”

Focus now turns to the important U.S. monthly jobs report due later in the day. On Thursday, the reading on the U.S. personal consumption expenditures (PCE) price index, both headline and core, was in line with expectations.