The rupee has witnessed a significant decline since the start of this year amid sustained foreign fund outflows and weak macroeconomic environment.
Currencies And Forex | Edited By Anshul (With inputs from agencies) | Updated: September 06, 2019 12:17 IST
On Thursday, the rupee had settled with gains of 28 paise at 71.84.
The rupee rose by as much as 17 paise – or 0.24 per cent – against the US dollar on Friday. After opening marginally lower against the greenback at 71.87 against the greenback, the rupee turned positive in the first few minutes of trade, tracking a positive trend in Asian markets on easing concerns on the US-China trade front. The rupee moved in a range of 71.67-71.89 against the dollar. The rupee was last seen trading at 71.71 against the US currency. According to analysts, gains in the domestic equity markets and news of resumption of US-China trade talks in October supported the rupee.
Here are 10 things to know about rupee’s movement today:
- China and the US have agreed to hold the next round of trade negotiations in Washington in early October to end the bruising trade war.
- Domestic equity market benchmark Sensex rose as much as 223.07 points higher to hit 36,867.49 and the broader NSE Nifty index climbed to as much as 10,906.80 at the strongest level in morning deals.
- The 10-year government bond yield was last seen at 6.60 per cent, as against its previous close of 6.58 per cent.
- Weakening of the US dollar overseas supported the rupee. The dollar index, which gauges the greenback’s strength against six peers, fell 0.01 per cent to 98.40.
- However, sustained foreign fund outflows and rising crude prices kept the gains in the rupee in check.
- Foreign institutional investors (FIIs) remained net sellers in the capital market, pulling out Rs 561.17 crore on Thursday, provisional data from the National Stock Exchange showed.
- Crude oil prices strengthened on Friday, with Brent crude futures – the global benchmark – rising 0.25 per cent to $61.10 per barrel.
- Analysts expect the rupee to track trends in the Asian currencies in the near term. “Rupee is expected to follow movement of Chinese currency as it has been doing since August,” said VK Sharma, head PCG & capital markets strategy, HDFC Securities.
- The rupee has witnessed a significant decline since the start of this year amid sustained foreign fund outflows and weak macroeconomic environment.
- According to news agency Reuters, the rupee will not regain the ground lost against the dollar in the coming year. After gaining about 2 per cent following a victory in the general election by the incumbent government late in May, the rupee has lost nearly 6 per cent since July 5 budget when a surcharge on foreign investments was introduced.
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