The rupee furthered its losses for the second day, dropping 15 paise to close at 71.08 against the US dollar on Friday amid strengthening of the American currency overseas and rising crude prices.
At the interbank foreign exchange market, the rupee opened lower at 70.98 to the US dollar and lost further momentum to touch a low of 71.10. It finally settled the day at 71.08, showing a fall of 15 paise over its previous close.
During the week, the domestic unit lost 14 paise. Global crude benchmark Brent was trading 0.51 per cent higher at USD 65 per barrel. The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.17 per cent to 97.48. The 10-year Indian government bond yield was at 6.63 per cent.
"The greenback rose after data showed retail sales in the US picked in December. From the US, market participants will be keeping an eye on industrial production and housing numbers and better-than-expected number could extend gains for the dollar," said Gaurang Somaiyaa, Forex and Bullion Analyst, Motilal Oswal Financial Services.
Forex traders said the rupee was trading lower despite the US-China signing the phase-1 trade deal, as huge uncertainty still remains, which might make it difficult for China and the US to reach a comprehensive trade deal. The United States on Wednesday signed the first phase of a trade deal with China, which President Donald Trump described as historic, concluding more than a year of tough negotiations between the two largest economies of the world.
Foreign institutional investors bought equities worth 264.26 crore on a net basis on Friday, according to provisional exchange data.
On the domestic stock market front, the BSE Sensex was up 12.81 points or 0.03 per cent at 41,945.37. The broader Nifty, however, settled 3.15 points or 0.025 per cent lower at 12,352.35.