Markets

Rupee rises 8 paise to 70.75 against U.S. Dollar in early trade

Photo for representational purposes only

Photo for representational purposes only  

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Forex traders said higher opening in domestic equities and foreign fund inflows also supported the local unit

The Indian rupee appreciated by 8 paise to 70.75 against the U.S. Dollar in early trade on December 16 as easing crude oil prices and positive developments on the U.S.-China trade talk front strengthened investor sentiments.

Forex traders said the weakening of the U.S. Dollar vis-a-vis other currencies overseas also supported the Rupee.

At the interbank foreign exchange the rupee opened at 70.80, then gained further ground and touched a high of 70.75, registering a rise of 8 paise over its previous close.

On December 13, Rupee had settled for the day at 70.83 against the U.S. Dollar.

The domestic unit, however, could not hold on to the gains and was trading at 70.80 against the dollar at 0940 hrs.

U.S.-China agreement

U.S. President Donald Trump on December 13 said that the U.S. and China have reached a historic agreement on a phase one trade deal. The phase one of the trade deal requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange. It also includes a commitment by China that it will make substantial additional purchases of U.S. goods and services in the coming years.

Forex traders said higher opening in domestic equities and foreign fund inflows also supported the local unit, while weak macro economic numbers weighed on the domestic unit and restricted the upmove.

Rising food prices pushed the retail inflation in November to over three-year high of 5.54%, while the industrial sector output shrank for third month in a row by 3.8% in October.

Finance Minister Nirmala Sitharaman on December 13 promised more stimulus measures for sectors of the economy in distress as she counted on steps taken till now to boost growth by driving up consumption. Domestic bourses opened on a positive note on December 16 with benchmark indices Sensex trading 31.38 points higher at 40,041.09 and Nifty up 5.80 points at 12,092.50.

Foreign institutional investors (FIIs) purchased shares worth ₹115.70 crore on December 13, according to provisional exchange data.

Brent crude futures, the global oil benchmark, fell 0.35% to trade at $64.99 per barrel. The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell by 0.11% to 97.06. The 10-year government bond yield was at 6.77% in morning trade.

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Printable version | Jan 26, 2020 6:33:06 PM | https://www.thehindu.com/business/markets/rupee-rises-8-paise-to-7075-against-us-dollar-in-early-trade/article30317423.ece

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