Home/ Market / Stock-market-news/  Rupee retreats 31 paise to 70.87 against US dollars

Mumbai: The Indian rupee on Monday erased all gains made earlier in the day and closed weaker against US dollar as traders weighed the latest developments in the trade dispute between US and China.

The rupee ended at 70.87 a dollar, down 0.43% from Friday's close of 70.57. Having opened at 70.43 a dollar, the Indian unit surged to 70.36 — a level last seen on 5 August — in early trade.

Asian currencies weakened after news report suggested that US president Donald Trump administration is considering restrictions on fund flows to China.

“During early trade, rupee surged to 8-week high of 70.36. However, the gains got capped by RBI intervention. Also, globally risk appetite plunged as US-China trade concerns continue to linger. There is a possibility that US may curb investments in China. Thus any developments on US-China trade front will keep the rupee under pressure," said Rahul Gupta, Currency Research Head, Emkay Global Financial Services.

Gupta expects prices to move towards 71.50 in the coming days. Ahead of RBI policy this week, rupee will remain on edge. “We expect RBI to cut rates by 25 bps," he added.

Traders await the government’s borrowing plans for the second half of the current fiscal that will be announced later today.

The benchmark Sensex ended 0.4% lower or 155.24 points at 38667.33. So far this year, the index has gained 7.64%.

The yield on the 10-year Indian government bond was at 6.702% compared with its previous close of 6.735%.

In the year so far, the rupee has weakened 1.5%, while foreign investors have bought nearly $6.25 billion in Indian equities and $4.14 billion in debt.

Other Asian currencies were also weak. China Renminbi was down 0.26%, Indonesian rupiah 0.16%, Singapore dollar 0.09%, China Offshore 0.06%, Malaysian ringgit 0.05%. However, South Korean won was up 0.3%, Thai Baht 0.18%, Philippines peso 0.13%.

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Updated: 30 Sep 2019, 07:47 PM IST
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