Mumbai: The Indian rupee ended nearly unchanged from its previous close at 85.33 per dollar on Tuesday, after touching a peak of 84.63 during the day. The rupee gave up its gains amid dollar buying from oil companies, foreign investors and state-run banks, traders said.
The rupee opened at 84.70/$1 versus 85.37 per dollar close on the previous day (Friday). The initial optimism seen in the rupee on Tuesday came on the back of US-China trade agreement and a ceasefire agreement between India and Pakistan.
“A key question is what this trade deal means and where Asian currencies will stand relative to China,” said MUFG Bank in a note. “This is perhaps most relevant for the likes of India, Malaysia, Vietnam and Thailand, which are most likely to be able to substitute China’s exports, and where there are moves to try to strike a trade deal with the US, most notably for India and Vietnam.”
During the closing hours, the dollar index was at 101.6, while US treasury bill yields dipped to 4.5%.
Brent crude oil on the other hand rose to $65.25 per barrel from $60 per barrel seen last week, in response to the US-China trade deal.
Rising oil prices is seen as a negative factor for the economy as India is a major importer of the commodity.
Separately, yield on the government bond maturing in 2034 (old benchmark) ended at 6.32%, down 5 basis points from the previous close of 6.37%, while the yield on the new 10-year benchmark bond maturing in 2035, ended at 6.27%, CCIL data showed.