Rupee Gives Up Early Gains To Drop To 70.92 Against Dollar: 10 Points

Analysts say the rupee is likely to post some recovery in the near term as the dollar weakens amid disappointing US data.

Rupee Gives Up Early Gains To Drop To 70.92 Against Dollar: 10 Points

Rupee Vs Dollar Rate: The rupee has appreciated 0.76% against the US dollar so far this year

The rupee gave up intraday gains on Thursday to close at 70.94 against the US dollar, after the US signed the first phase of a trade deal with China. After starting the day nearly unchanged at 70.80 against the dollar, the rupee edged higher before erasing all of the day's gains to decline to as low as 70.99 in late afternoon deals. As of Wednesdays close, the rupee has appreciated 0.76 per cent against the US dollar so far this year.

Here are 10 things to know about the rupee-dollar exchange rate (INR vs USD) today:

  1. The US signed Phase 1 of the trade deal with China on Wednesday, which includes Intellection Property (IP) Protection and Enforcement, ending forced technology transfer, dramatic expansion of American agriculture, removing barriers to American financial services, ending currency manipulation.

  2. The first phase of the US-China trade deal rebalances the trade relationship between the two largest economies and effective dispute resolution.

  3. The agreement was signed by US President Trump and Chinese Vice Premier Liu He, Politburo Member and Vice Premier of the People's Republic of China. Mr Trump described the deal as historic, concluding more than a year of tough negotiations between the two sides.

  4. “After having played a tightly defensive test in the early trade, rupee lost some grounds to close near 70.92 levels amid buying pressure exerted by some nationalized bank. In the near term, gains in the pair might be restricted close to the base and support of 70.50-70.60 levels as RBI is continuously hoarding dollars and keeping the pair well above its base line. Therefore, in the short space, the pair is expected to trade between 70.50-71.50 levels,” said Amit Pabari, managing director, CR Forex Advisors.

  5. A slew of disappointing data from the US has bolstered expectations that the Federal Reserve would keep rates on hold for a prolonged period, according to IFA Global, a forex advisory firm.

  6. Meanwhile, the S&P BSE Sensex and NSE Nifty 50 indexes ended on flat after hitting record highs in the morning deals as investors booked profits at all-time high levels, analysts said. The Sensex rose above symbolically important level of 42,000 for the first time while the Nifty touched a new record high of 12,389.05. The Sensex ended 0.14 per cent or 60 points higher at 41,933 and the NSE Nifty 50 index advanced 0.1 per cent or 12 points to close at 12,356.

  7. The dollar index - which gauges the US dollar against six peers overseas - edged lower on Thursday before turning flat.

  8. Foreign institutional investors turned net sellers in the Indian capital markets, the FIIs sold shares worth Rs 395.24 crore, provisional data from the NSE showed.

  9. Crude oil prices rose after the first phase of the US-China trade deal set the stage for a surge in Chinese purchases of American energy products.

  10. Brent crude futures - the global benchmark for crude oil - were last up 0.7 per cent at $64.45 a barrel.

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