The rupee settled at 71.30 against 71.45 at the previous close. The
local unit moved in 71.0350-71.4175 per dollar band intra-day.
The Indian rupee fell for a second straight week against the dollar,
on broad greenback strength amid weakness in the euro, even as
lower oil prices and likely foreign fund inflows in local bonds
following a surprise rate cut at home restricted further losses. Dollar
strength will continue to weigh on the rupee. However, further
losses were capped as traders cut their long positions as a dovish
policy yesterday drove FPIs’ interest in Indian bonds, particularly the
corporate ones. Likely dollar inflows from a European telecom
company also helped the local unit to pare some losses.
Global Currency
The dollar was holding close to two-week highs against the euro in
early trading in Europe Friday after a report downplaying the
chances of the U.S. and China ending their trade war. But the dollar’s
strength is also a function of other currencies’ weakness right now,
especially since the Federal Reserve has effectively put further
interest rate increases on hold.
The British pound has been range-bound since the Bank of England’s
press conference Thursday, where Governor Mark Carney repeated
that the next interest rate move could be up or down, depending
how Brexit plays out. “The Monetary Policy Committee are wage
hawks and would be in hiking mode if not for Brexit,”.
Global Markets
Brent oil inched up on Friday but was heading for a weekly loss,
pulled down by worries about a global economic slowdown,
although OPEC-led supply cuts and U.S. sanctions against Venezuela
provided crude with some support.
Gold held steady on Friday en route to its first weekly loss in three,
pressured by gains in the dollar, but kept above the $1,300 level by
concerns over economic growth in Europe and elsewhere.
