The rupee is down 10.6% against the dollar so far this year
The rupee rose by 23 paise to close at 70.67 against the dollar on Friday, supported by strength in domestic equities and weakness in the greenback overseas. A fall in crude oil prices – with benchmark Brent slipping below the $60-a-barrel mark – amid lack of clarity on the future course of production after conclusion of a key meeting of the top producers supported the currency, say analysts. The rupee, however, finished the week with a loss of 109 paise – or 1.6 per cent – against the greenback.
Here are 10 things to know:
- The rupee opened at 70.58 on Friday rose as much as 46 paise to touch 70.44 against the dollar at the day’s strongest point. It gave up half of those advances by the end of the session, to settle 0.3 per cent higher for the day.
- Analysts, however, see some pressure in the forex market going forward.
- “Outcome of elections for five state assemblies will be announced on Tuesday and that will decide the fate of the rupee and equity markets in the short run,” said VK Sharma, head PCG and capital markets group, HDFC Securities.
- Credit ratings major Fitch has said it expects the rupee to weaken to 75 against the dollar by the end of next year, on a widening current account deficit and tighter global financing conditions.
- Domestic equity markets recovered from two-week lows tracking strength in global peers, with the Sensex ending 361 points higher at 35,673 and the Nifty settling at 10,701, up 99 points – or 0.9 per cent – from the previous close.
- The MSCI All-Country World Index, which tracks shares in 47 countries, was up 0.3 percent and on track to end the week down 2 per cent.
- Crude oil prices fell further as producers’ group OPEC or Organization of the Petroleum Exporting Countries delayed a decision on reduction in output while awaiting support from non-OPEC heavyweight Russia. Brent futures fell 0.5 per cent to trade below $60 a barrel.
- The dollar index – which measures the greenback against six major peers – eased to 96.823, and fell to 112.80 yen from a 113.85 high at the start of the week.
- Federal Reserve Chairman Jerome Powell emphasised the strength of the labour market in remarks made late on Thursday, fuelling hopes that the US central bank could slow down its pace of interest rate hikes next year.
- The rupee is down 10.6 per cent against the dollar so far this year.
(With agency inputs)
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Source: NDTV Profit