Rupee jumps 12 paise to 71.67 against dollar in early trade; US-China trade talks back domestic currency

  • Firm trend in domestic equity markets and easing crude oil prices also revived the rupee sentiment, forex dealers said

  • The domestic currency, however, could not hold on to the initial gains and was trading at 71.67

  • The rupee had slipped 3 paise to close at 71.80 against the US currency on Thursday

Mumbai: The rupee appreciated by 12 paise to 71.67 against the US dollar in early trade on Friday following positive developments in the US-China trade talks.

Besides, firm trend in domestic equity markets and easing crude oil prices also revived the rupee sentiment, forex dealers said.

At the interbank foreign exchange, the rupee opened strong at 71.76 and gained further strength to touch a high of 71.49 against the US dollar. The domestic currency, however, could not hold on to the gains and was trading at 71.67.

The rupee had slipped 3 paise to close at 71.80 against the US currency on Thursday.

 Rupee jumps 12 paise to 71.67 against dollar in early trade; US-China trade talks back domestic currency

Representational image. Reuters.

Renewed hopes for US-China trade talks after Beijing indicated that it may not retaliate against the latest tariffs imposed by the US helped the domestic currency, dealers said.

The BSE Sensex was trading 205.70 points, or 0.55 percent, higher at 37,274.63, while the broader Nifty rose 61.35 points, or 0.56 percent, to 11,009.65 in morning trade.

In the annual report for FY19, released Thursday, the RBI conceded that diagnosing the exact problems is "difficult", but reiterated that the issues are not structural in nature, barring those around land, labour and agri produce marketing.

"The key question that confronts the economy is: are we dealing with a soft patch, or a cyclical downswing, or a structural slowdown?" the RBI, which has revised down its GDP forecast to 6.9 percent earlier this month, concludes that "the ongoing deceleration can be in the nature of a soft patch mutating into a cyclical downswing, rather than a deep structural one."

Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 986.58 crore on Thursday, as per provisional data.

Brent crude futures, the global oil benchmark, declined 0.02 percent to $61.07 per barrel.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.02 per cent to 98.52.

The 10-year government bond yield was down at 6.55 percent in morning trade.

Updated Date: Aug 30, 2019 10:45:50 IST