Rupee gains 6 paise to 86.06 against US dollar amid weaker greenback, softer crude prices

The rupee gained 6 paise to 86.06 against the US dollar on Friday, supported by softer crude prices and a weaker dollar. However, continued foreign fund outflows limited further gains. Equity markets also opened lower amid trade deal uncertainties.

Mumbai: The rupee appreciated 6 paise to 86.06 against the US dollar in early trade on Friday on the back of a weaker greenback and a marginal drop in global crude oil prices.

However, steady foreign fund outflows capped sharp gains for the local unit, forex traders said.

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At the interbank foreign exchange, the rupee opened at 85.99 before dropping to 86.06 against the US dollar, up 6 paise from its previous close. The rupee declined 20 paise to settle at 86.12 against the US dollar on Thursday.

“Thursday’s buying of US dollar was mainly on account of the outflow of an IPO subscribed 63 times, the allotment of which was done Thursday itself. Today it will be up to the Reserve Bank whether it wants to allow further weakening or keep it on the already defined range.

“We await for further developments on the trade deal, which still is to be finalised and signed between India and the US,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

Negotiations between India and the US are underway to iron out pending issues for a trade deal, the Ministry of External Affairs (MEA) said on Thursday. The comments came a day after US President Donald Trump said that Washington is “very close” to the trade pact with India.

Brent crude, the global oil benchmark, was down by 0.14 per cent to USD 69.42 per barrel in futures trade.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.29 per cent to 98.45.

On the domestic equity market front, the Sensex declined 185.67 points to 82,073.57 in early trade, while the Nifty was down 45.4 points to 25,066.05.

Foreign institutional investors (FIIs) sold equities worth Rs 3,694.31 crore on a net basis on Thursday, according to exchange data.