Rupee snaps 3-day losing streak; spurts 17 paise to 68.80 against dollar on hopes of Fed rate cut

Mumbai: The rupee snapped its three-day losing streak to close 17 paise higher at 68.80 against the US dollar Friday as market participants pinned their hopes on an aggressive rate cut by the US Federal Reserve later this month. Forex traders said the rupee along with most Asian currencies strengthened following dovish comments from New York Fed officials, offsetting the impact of soaring crude oil prices amid fresh geopolitical tensions in the Middle East. At the interbank foreign exchange market, the local unit opened on a firm footing at 68.78, and shuttled between a high of 68.74 and a low of 68.95 during the day. The rupee finally closed at 68.80, up 17 paise over its previous close. [caption id=“attachment_5114261” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] The rupee had settled at 68.97 against the US dollar Thursday. “Rupee snapped the 3-day losing streak and settled 17 paise higher against the US dollar Friday, with traders expecting a more aggressive policy easing by the US Federal Reserve,” said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities. Sharma further said the “rupee opened strong but witnessed selling throughout the day on the back of weak domestic equity markets”. On a weekly basis, the local currency lost 11 paise. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.21 percent to 96.99. The 10-year government bond yield was at 6.36 percent on Friday. Brent crude futures, the global oil benchmark, surged 1.63 percent to $62.94 per barrel after the US said it had destroyed an Iranian drone in the Strait of Hormuz, stoking fears of supply disruptions. On the domestic equity market front, the BSE Sensex plunged 560 points Friday after the government thwarted hopes of tax relief for FPIs. The 30-share index cracked 560.45 points or 1.44 percent to settle at 38,337.01. Similarly, the broader NSE Nifty sank 177.65 points or 1.53 percent to 11,419.25. Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 1,404.86 crore Thursday, provisional exchange data showed. The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 68.8758 and for rupee/euro at 77.4389. The reference rate for rupee/British pound was fixed at 85.7164 and for rupee/100 Japanese yen at 63.99.