Currency Market News: Rupee gains 1 paisa to 85.53 vs dollar

Rupee gained 1 paisa to settle at 85.53 (provisional) against the US dollar on Friday, helped by strong foreign institutional investor (FII) inflows and a slight drop in the dollar index.

However, the rupee’s rise was limited due to higher Brent crude prices, weak domestic equity markets, and data showing India’s trade deficit widening in April, forex traders said.

At the interbank foreign exchange, the rupee started strong at 85.28 and moved between 85.28 and 85.70 during the day. It finally closed at 85.53, up just 1 paisa from Thursday’s close. On Thursday, the rupee had weakened by 22 paise to close at 85.54 against the dollar.

Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said, “Though the Asian currencies were all up, and so were the European currencies, the rupee could not make much headway towards 85.00 level and was getting sold near 85.30 and staying in a range broadly between 85-86 and narrowly between 85.25 and 85.75, which is also the range expected on Monday.”

Also Read:Currency Market News: Rupee gains 12 paise to 85.42 against US dollar 

Dollar index down again, Brent crude oil inches

The dollar index, which measures the greenback’s strength against six major currencies, was down 0.12 per cent at 100.75. Brent crude oil, the global benchmark, rose 0.14 per cent to $64.62 per barrel in futures trading.

Government data released on Thursday showed India’s trade deficit widened to a five-month high of $26.42 billion in April. Imports jumped 19.12 per cent year-on-year to $64.91 billion, mainly due to increased shipments of crude oil and fertiliser.

Exports also rose, up 9.03 per cent to $38.49 billion the highest in six months  driven by strong growth in electronics and engineering goods.

Bhansali added that exports grew about 9 per cent while imports increased by 19.13 per cent, pushing the trade deficit higher. However, service exports have helped India manage this trend over recent months and years.

Also Read:Final Trade: Sensex dips 200 pts, Nifty closes at 25,020; IT drags with HCL, Infosys down 2% 

Stock market summary

Indian equity markets ended lower in a volatile session, though the Nifty50 index held above the key 25,000 level. The Nifty50 fell 0.17 per cent, or 42.3 points, to close at 25,019.8, while the BSE Sensex dropped 0.24 per cent, or 200.15 points, to end at 82,330.59.

On the weekly front, both the Nifty and Sensex recorded solid gains of 4 per cent and 3.62 per cent respectively. Foreign institutional investors (FIIs) were net buyers, purchasing equities worth Rs 5,392.94 crore on Thursday, according to exchange data.

(With PTI inputs)