The U.S. Treasury Department on Monday designated China as currency manipulator, a move that could escalate the tense trade relations between the two nations. Beijing has let the yuan fall to a politically sensitive level against the dollar and Chinese firms have reportedly stopped buying US farm produce.
The rupee opened weak at 68.61 at the interbank forex market and slipped further to 68.67, showing a decline of 16 paise against its previous close.
At the interbank foreign exchange, the domestic unit opened at 69.02. During the day, the domestic unit witnessed a high of 68.93 and a low of 69.07 against the US dollar.
Foreign funds infused Rs 31.73 crore in the capital markets on a net basis Tuesday, provisional data showed.
Gold prices rose by Rs 300 to Rs 33,870 per 10 gram in the bullion market here Friday on fresh buying by jewellers and a firm trend overseas, according to the All India Sarafa Association.
Prime Minister Narendra Modi on Friday announced a USD 200 million line of credit for Kyrgyzstan after wide-ranging talks with Kyrgyz President Sooronbay Jeenbekov as the two sides upgraded their ties to the strategic partnership level and signed 15 agreements, including one to eliminate double taxation.
At the Interbank Foreign Exchange, the rupee opened on at 69.33 then fell to 69.38 against the US dollar, showing a decline of 4 paise over its previous closing.
The rupee had settled at 69.44 against the US dollar Tuesday.
Besides, a positive start of the equity markets influenced the recovery of the rupee, they added.
The rupee Wednesday had strengthened by 17 paise to close at a two-month high of 69.54 against the US dollar.
Fresh foreign fund inflows, easing crude prices supported the rupee and restricted the fall.
The rupee on Friday weakened by 16 paise to close at 71.19 against the US dollar amid rise in demand for the greenback from exporters and unabated increase in global crude oil prices.
Benchmark Sensex turned choppy after opening higher in early trade on Tuesday amid sustained capital outflows by foreign funds and surging global crude oil prices.
The rupee opened lower at 69.93 against the dollar and dropped further to quote at 70.07, 37 paise down over its previous close.
On Monday, against the US dollar, the rupee ended almost flat at 73.45.
The domestic currency failed to sustain the momentum after Brent crude breached the USD 84 per-barrel-mark again and the US dollar strengthened overseas.
Besides, the dollar's overseas weakness, easing global crude oil price and higher opening in the domestic stock market supported recovery in the domestic unit, traders said.
The British pound held firm after making its biggest gains in seven months the previous day, following comments from the European Union's chief negotiator offering Britain closing ties after Brexit.
In morning deals, rupee touched a high of 68.33.
The US Treasury said it will be keeping a “close watch” on the RBI's in view of the “notable increase in the scale and persistence” of dollar purchases.
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