Rupee pares early gains, settles 1 paise lower at 70.87 against US dollar

The rupee gave away its early morning gains to settle on a flat note at 70.87 against the US dollar ahead of the signing of the US-China trade deal and weak macro economic data on the domestic front.

The domestic currency had opened on a strong note in line with other Asian peers after the US on Monday removed the currency manipulator label it imposed on China last summer.

However, weak macro data weighed on the local unit. Besides, rising crude oil prices and strengthening of the American currency in the overseas market also dragged the domestic unit lower.

At the interbank foreign exchange, the rupee opened on a strong note at 70.78 against the US dollar.

The local unit however, pared the gains and after witnessing a low of 70.96, it closed at 70.87 against the US dollar, lower by just 1 paise over its previous closing.

The rupee on Monday had closed at 70.86 against the US dollar.

"Higher than expected retail and wholesale inflation weighed on Indian bond as MPC may pause rate in coming meeting. The benchmark 10 year bond yield jumped 6 bps to 6.65 per cent," said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities.