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    Rupee hits 1-week high as dollar slides on trade war worries

    Synopsis

    The rupee finally settled with a gain of 10 paise at 65.01, a level last seen on March 16.

    PTI
    The rupee today made an impressive recovery from early losses to close 10 paise higher at a one-week high of 65.01 against the US currency which suffered losses in global markets on intensifying trade war worries.

    Fear and panic gripped the currency market sentiment initially after US President Donald Trump decided to slap tariffs on China.

    Weighed down by heavy dollar demand, the home currency plunged to an intra-day low of 65.21 before staging a rebound to a high of 64.97.

    The rupee finally settled with a gain of 10 paise at 65.01, a level last seen on March 16, when it had closed at 64.94.

    "US Dollar's weakness following trade war fears and FII demand for rupee especially for bonds, ensured that rupee remained unscathed despite equity market sell off. Bond yields will continue to be in focus ahead of RBI rate decision as well as release of auction calendar, both early next month," Anand James, Chief Market Strategist at Geojit Financial Services said.

    The broad based US dollar's weakness also supported the recovery momentum. The US Dollar Index, which measures the greenback's strength against a basket of currencies, was down 0.28 per cent at 89.22.

    The Japanese yen hit a 16-month high against the dollar today on concerns over rising global trade tensions triggered a bout of investor risk aversion.

    Global crude prices rose today after the Saudi energy minister said OPEC would need to keep coordinating supply cuts with non-member countries, including Russia into 2019. Brent crude was trading at USD 69.01 a barrel in early Asian trade.

    Meanwhile, local bourses with benchmark indices hitting five-month low as trade war fears escalates.

    The flagship Sensex dropped almost 410 points to end at 32,596.54, while Nifty lost 116.70 points at 9,998.05.

    Bond yield fell for the third session to hit five-week low ahead of the April-September bond auction calendar. The 10-year bond yield ended at 7.557 against previous close of 7.563. Bond yields and prices move in opposite directions.

    The RBI, meanwhile, fixed the reference rate for the dollar at 65.1333 and for the euro at 80.3354.

    In the cross currency trade, the rupee closed at 91.9552 from 92.0630 against the pound sterling. It strengthened against the euro to 80.3354 from 80.3713 earlier.

    The Indian unit also edged higher against the Japanese yen to conclude at 62.13 per yens from 62.44 yesterday.

    In forward market, the benchmark six-month premium payable in August moved up to 116-118 from 115.50-117.50 paise and the far-forward February 2019 contract also edged higher to 232-234 paise from 230.50-232.50 paise yesterday.



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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