Rupee Gains Ground Amid Trade Talk Jitters; Forex Reserves Dip
Forex traders said the rupee was trading in a narrow range as the demand for dollar from importers continued to keep the American unit well bid against the rupee.
The rupee appreciated 9 paise to 86.43 against the US dollar in early trade on Monday, tracking a softer greenback, though the upside for the local unit was limited as US-India tariff negotiations remained in focus.
Forex traders said the rupee was trading in a narrow range as the demand for dollar from importers continued to keep the American unit well bid against the rupee.
Moreover, the support from developing trade agreements was negated by the sustained foreign fund outflows, they said.
At the interbank foreign exchange, the domestic unit opened on a positive note and touched 86.43 against the greenback in initial deals, higher by 9 paise from its previous closing level.
On Friday, the rupee declined 12 paise to settle at 86.52 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.03 per cent to 97.61.
Brent crude, the global oil benchmark, went up by 0.48 per cent to USD 68.77 per barrel in futures trade, supported by developing trade agreements.
Brent oil prices edged up from three week lows in Asian trading to USD 68 per barrel after EU and US reached a trade agreement that eased tariff concerns and boosted future energy demands, said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.
Also Read : US And EU Sign Landmark Trade Deal, Slash Tariffs To 15 Per Cent And Avert War
The investors are now watching developments from FED which begins its two-day policy meeting from Tuesday, Bhansali said.
"The Indian rupee is expected to be steady near 86.47 after the European deal was done but India is still away from a conclusive deal," Bhansali said, adding that the month-end demand may keep the rupee stable.
Meanwhile, in the domestic equity market, Sensex declined 67.43 points or 0.08 per cent to 81,395.66, while Nifty fell 14.25 points or 0.06 per cent to 24,851.25.
Foreign institutional investors (FIIs) offloaded equities worth Rs 1,979.96 crore on a net basis on Friday, according to exchange data.
Meanwhile, India's forex kitty declined by USD 1.183 billion to USD 695.489 billion during the week ended July 18, the RBI said on Friday.
In the previous week, the overall kitty had dropped by USD 3.064 billion to USD 696.672 billion. The reserves had touched an all-time high of USD 704.885 billion at end-September 2024.
(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)
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