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Rupee strengthens 17 paise to close at 70.97 against dollar on easing trade war concerns

Mumbai: The Indian rupee on Monday firmed up by 17 paise to close at 70.97 against the US dollar in line with most Asian currencies amid hopes that the US and China will soon reach an agreement to settle their trade tariff issues.

Besides, the American currency's weakness against its major rivals and a rally in domestic equities supported rupee prospects.

At the interbank foreign exchange market, the rupee opened on a positive note at 71 against the US dollar. The domestic unit swung intra-day between a high of 70.96 and a low of 71.09, before settling at 70.97 -- a rise of 17 paise over its previous close.

On Friday, the rupee had gained 10 paise to end at 71.14 against the US dollar.

 Rupee strengthens 17 paise to close at 70.97 against dollar on easing trade war concerns

Representational image. Reuters.

Meanwhile, the dollar index, which tracks the American unit against a basket of six major currencies, was down 0.18 percent at 96.33.

"Indian rupee rose along with the Asian currencies on ease of concerns from US-China trade deal. US President Trump has extended March 1 deadline for additional imports from China to come under tariff...," V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities, said.

Global equities and crude oil traded higher on higher risk appetite while safe-haven dollar and yen currencies are lower, he said.

Brent crude dropped 20 cents to $66.92 per barrel while West Texas Intermediate declined 14 cents at $57.12 per barrel.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee against the dollar at 71.0420 and against euro at 80.6028. The reference rate for the rupee against the British pound was fixed at 92.8808 and against per 100 Japanese yen at 64.22.

Foreign institutional investors (FIIs) bought equities worth a net Rs Rs 2,134.35 crore Monday, while domestic institutional investors sold shares to the tune of Rs 1,746.40 crore, provisional data showed.

On domestic bourses, BSE benchmark Sensex Monday ended 342 points, or 0.95 percent, higher at 36,213 and the broader Nifty soared 88.45 points, or 0.82 percent, to conclude the session at 10,880.

Forex traders will be closely watching speeches this week from top Federal Reserve officials -- including chairman Jerome Powell's appearance in front of lawmakers -- hoping for clues about the bank's monetary policy plans.

Wall Street "will be looking for soothing comments about the future size of the balance sheet -- the bigger the better -- and insights into future rate hikes", said Jeffrey Halley, senior market analyst at OANDA.

Market participants will also watch for December quarter GDP, due this week, which could have an impact on RBI's monetary policy panel interest rate decision.

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Updated Date: Feb 25, 2019 19:05:35 IST