Indian rupee slipped to over 2 months low and ended lower by 19 paise at 74.74 per dollar, amid buying saw in the domestic equity market.
It opened 16 paise lower at 74.71 per dollar versus Thursday’s close of 74.55 and traded in the range of 74.66-74.87.
At close, the Sensex was up 166.07 points or 0.32% at 52484.67, and the Nifty was up 42.20 points or 0.27% at 15722.20.
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Oil prices held steady on Friday after OPEC+ ministers delayed a meeting on output policy as the United Arab Emirates balked at a plan to add back 2 million barrels per day (bpd) in the second half of the year.
“The Indian rupee has drifted lower to test three-month lows as the domestic equities witnessed selling pressure and the greenback continues to strengthen, hitting a three-month high. The gradual uptick in crude oil prices wherein they are trading at their highest in two years is also acting as a headwind for the domestic currency,” said Sugandha Sachdeva, VP- Commodity & Currency Research, Religare Broking.
“Besides, sentiments have also taken a beating due to a drop in domestic manufacturing PMI in June, reflecting the impact of the second wave of the virus even as it subsides, enabling the recovery to get back on track.”
“The near-term bias is negative, but the markets are now eyeing key US jobs report for June to assess the Fed’s stance going ahead, amid the chatter surrounding the taper-tantrum,” she added.
The US dollar was perched at a 15-month high on the yen and at multi-month peaks against other majors on Friday, as traders wagered strong US labour data could lift it even further.
Gold prices held in a tight range on Friday as investors stayed away from making big bets ahead of the US nonfarm payrolls data that could sway Federal Reserve’s monetary policy stance.
USDINR moving up as dollar index rises, European currencies fall, Asian currencies steady and oil keeps rising. The range for USDINR for the day is 74.30/90, said Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors.
Exporters who have already hedged can keep a stop loss of 74.40 and wait or sell at 74.84 level while importers can do cash buying at 74.50 and wait for hedging, he added.
