Rupee closes above 86 mark; Trump-Powell tensions weigh on Asian currencies

Indian Rupee today: The domestic currency closed 14 paise lower at 86.08 against the dollar on Thursday, according to Bloomberg

Indian Rupee gave up early gains on Thursday to close above the 86 level as the dollar rose amid uncertainties in US Federal Reserve leadership, keeping investors nervous. 

 

The domestic currency closed 14 paise lower at 86.08 against the dollar on Thursday, according to Bloomberg. The rupee has witnessed 0.54 per cent depreciation in the current calendar year. The Rupee fell alongside all major Asian currencies on Thursday as risk-off sentiment deepened. The currency largely remained within the 85.70-86 band throughout the week. 

 

On Wednesday, Trump denied reports that he planned to remove Powell after he floated the idea in a meeting with congressional Republicans, which was leaked to the media. The US producer prices were unchanged last month, raising expectations that the Fed will cut interest rates in its upcoming meeting. 

 

The dollar index whipsawed, a measure of the greenback against a basket of six major currencies, and was up 0.31 per cent at 98.69. 

 

Meanwhile, optimism remains high over a potential India-US trade deal, with Trump expressing renewed hope for a quick conclusion, analysts noted. Trump hinted that a trade deal with India could mirror the one struck with Indonesia, which now faces a 19 per cent tariff, indicating India may also have to brace for tariffs exceeding the 10 per cent threshold under the proposed interim agreement.

 

Rupee traded weakly as the dollar index found support near the 98.70 mark, according to Jateen Trivedi, VP research analyst - commodity and currency at LKP Securities. "Weakness in domestic capital markets also weighed on the rupee. The currency continues to face resistance near the 85.50 levels and has struggled to hold above that zone. Going ahead, the rupee is expected to trade in a range of 85.75 to 86.25."

 

In commodities, crude oil prices snapped a three-day fall after US data showed a sharper-than-expected drop in crude inventories. Brent crude price was flat at 68.49 per barrel, while WTI crude prices were higher by 0.18 per cent at 66.50, as of 3:35 PM IST.