Rupee trades lower after two-day gains; opens weaker at 88.66/$

Indian Rupee today: The domestic currency opened 4 paise lower at 88.66 against the greenback on Friday

The Indian rupee weakened on Friday, snapping a two-day winning streak, as a stronger dollar and rising crude oil prices weighed on sentiment.

 

The domestic currency opened 4 paise lower at 88.66 against the greenback on Friday, according to Bloomberg. The Rupee has risen 0.15 per cent this month, while it has fallen 3.56 per cent this year.

 

The rupee opened stronger on Thursday and held its ground through the day, reflecting a rare calm that many see as the Reserve Bank of India's (RBI's) quiet handiwork, supported, this time, by a softer US dollar, Amit Pabari, managing director at CR Forex Advisors, said. 

 

   

The RBI's firm defence of the 88.80 level has established it as a strong resistance for USD/INR, while support at 88.50-88.60 keeps the rupee steady for now, Pabari said. "A breakthrough in the India-US trade talks could lift sentiment and push the pair below 88.40, paving the way for an appreciation toward 87.50-87.70, hinting that the rupee may be gearing up for a fresh bout of strength."

 

The rupee opened lower once again, with the RBI selling in the non-deliverable forward (NDF) market at 88.52, offering importers another opportunity to buy on dips, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. 

 

Talks of a trade deal between US President Donald Trump and Piyush Goyal have resurfaced, though a concrete agreement remains elusive, Bhansali said. The rupee is expected to open around 88.58 today, unless the RBI takes a different stance, possibly encouraging exporters to sell for cash and near-term positions at higher levels while advising importers to buy on dips, he added. 

 

The dollar index failed to close above 100 as US shutdown concerns and higher job-cut data weighed on sentiment. The measure of the greenback against a basket of six major currencies was up 0.07 per cent at 99.80. With the dollar losing momentum, the rupee has found some much-needed breathing room, though how long this relief lasts will depend on global risk sentiment, Pabari said. 

 

In commodities, oil prices edged higher in Asian trading after dipping below $63 per barrel, remaining near a two-week low. Brent crude price was up 0.39 per cent at 63.63 per barrel, while WTI crude prices were higher by 0.49 per cent at 59.72 per barrel, as of 9:00 AM IST.