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Rupee weakens ahead of US jobs data; down 3 paise

Press Trust of India  |  Mumbai 

The failed to hold on to its early strong gains and eventually slipped back by 3 paise to end at 65.17 against the US on steady demand from importers and banks.

Consistent capital outflows from foreign funds against the backdrop of highly volatile domestic stock markets largely weighed on the trade.

Overall, forex market sentiment has been negative in the wake of rising protectionism and developments in foreign exchange and other financial markets.

The Indian unit initially strengthened against its American counterpart on stray selling by exporters along side a positive opening in local stock markets.

However, global mood improved gradually from a recent turmoil that stemmed from fears over the possibility of a global trade war faded on bout of optimism for a potential easing of tension spurred by a possible meeting between US and North Korea's Un.

In the meantime, the US gained ground in overseas trade in response to the easing pressure over a trade war and ahead of the highly-anticipated Non-Farm Payrolls.

The home opened a tad higher at 65.13 against the overnight close of 65.14 at the inter-bank foreign exchange market (forex).

It later made a strong move to hit a fresh intra-day high of 65.05 on easing dollar pressure, before retreating in late mid-afternoon session.

After touching session's low of 65.19, the local unit finally settled at 65.17, showing a modest loss of 3 paise, or 0.05 per cent.

For the week, the ended virtually steady at 65.17 against the dollar, snapping two-week downtrend.

The RBI, meanwhile, fixed the reference rate for the dollar at 65.0784 and for the euro at 80.1636.

In the international energy front, global crude prices regained some lost ground after two days of sell-offs amid optimism over a planned meeting between North Korea's Un and US

Kim also pledged to refrain from further nuclear or missile tests, lifting Asian stock markets and pulling along with them.

Brent crude futures were trading at USD 64.25 a barrel in early Asian trading.

Meanwhile, domestic boures succumbed to fresh selling pressure as the overnight relief rally quickly ran out of steam on growing worries that the trade war will spread far beyond and aluminium amid sparking fears of retaliatory moves by other countries.

Most Asian stocks, however made across-board gains following that US had agreed to meet North Korean leader Un, after years of hostile relations and nuclear threats between the two countries.

The benchmark BSE-Sensex slipped over 44 points to end at 33,307.14, while Nifty lost 16 points at 10,226.85.

The dollar index, which measures the greenback's value against a basket of six major currencies, was up at 90.22 in early trade.

In cross-currency trades, the bounced back against the pound sterling to close at 90.06 per pound from 90.32 and strengthened against the euro to finish at 80.16 from 80.58.

The Indian unit also hardened against the Japanese yen to conclude at 61.04 per yens from 61.38 yesterday.

Elsewhere, the common currency euro lost further ground against the US dollar on the back of slightly less dovish than expected ECB outcome even as euro-zone industrial output figures largely disappointed.

The Pound Sterling also witnessed bouts of volatility against the greenback after UK fell short expectations along with widening trade balance deficit amid worries about Brexit negotiations.

Meanwhile, BoJ left monetary policy unchanged as widely expected.

In market today, premium for dollar edged higher due to mild paying pressure from corporates.

The benchmark six-month premium payable in August inched up to 125.50-127.50 paise from 125-127 paise and the fag-February 2019 contract also gained marginally to 246-248 paise from 245.50-247.50 paise previously.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, March 09 2018. 19:30 IST