Rupee recovers 10 paise to close at 71.14 against dollar, posts second weekly gain

Mumbai: The rupee on Friday gained 10 paise to close at 71.14 against the US dollar on heavy foreign capital inflows after growing expectations that the Federal Reserve would keep the interest rate on hold this year.

A strengthening dollar ahead of the US-China trade talks and surging crude oil prices, however, restricted the rupee gains.

Foreign portfolio investors pumped in a huge Rs 6,311.01 crore into capital markets on Friday, provisional exchange data showed.

Analysts said that weak US economic data propped up expectations that the US Fed would keep the rate steady this year. The Fed minutes this week had also called for patience over tightening of rates in view of slowing global economic growth.

Rupee recovers 10 paise to close at 71.14 against dollar, posts second weekly gain

Representational image. Reuters

New orders for US-made capital goods dropped in December, signalling slow spending on machinery and equipment that could hamper economic growth, the data released Thursday showed.

"Indian rupee gains ahead of the US-China trade talks. However, the improvement in the US-China dialogue has been partly priced in and positive impact on the market could be limited and short term," VK Sharma, Head PCG & Capital Markets Strategy, HDFC Securities said.

At the Interbank Foreign Exchange (forex) market, the local unit opened almost flat at 71.23 and touched a high of 71.11 to the dollar in day trade.

The rupee finally settled at 71.14, showing a gain of 10 paise over the last close. The rupee had skidded by 13 paise to close at 71.24 against the US dollar on Thursday.

On weekly basis, the rupee gained 9 paise or 0.13 percent, its second week of gains in a row.

The US dollar recovered from initial losses to trade 0.09 percent up at 96.55 ahead of US-China trade negotiations.

US President Donald Trump will meet China's top trade negotiator on Friday night to forge a preliminary deal before tariffs on some Chinese imports more than double next month.

Brent crude futures, the global oil benchmark, was also trading 0.13 percent higher at $67.16 per barrel.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.2177 and for rupee/euro at 80.7528. The reference rate for rupee/British pound was fixed at 92.8271 and for rupee/100 Japanese yen at 64.29.

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Updated Date: Feb 22, 2019 19:19:53 IST

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