INR seen pressured by dollar strength, rebound in oil prices and muted equities add to weakness

INR fell in opening trades against the dollar on Friday tracking a bounce back in dollar overseas following mixed US economic data. Data from the United States revealed that the number of Americans filing for unemployment benefits dipped below forecasts, suggesting a strong labour market. However, the S&P Global Manufacturing PMI fell into contraction territory, signaling weakness. Meanwhile, US Treasury yields rose with the 10-year Treasury note climbing three basis points up to 4.416% and the US Dollar Index (DXY), which tracks the greenbacks performance against a basket of six currencies, is up 0.24% at 97.36. Investors now await the US Durable Goods Orders for June, which is due later on Friday. Meanwhile, rebound in international oil prices and likely muted open to local equities are adding further pressure on the domestic unit. The domestic currency opened at Rs 86.59 per dollar and pulled back slightly to 86.56 so far during the day. This was in comparison to previous close at 86.40. Indian shares look set to open lower on Friday as investors fret over stalled India-U.S. trade deal, slowing earnings growth and continued selling by foreign portfolio investors.

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