Rupee flat on day; dips on week as corporate, interbank dollar bids weigh
The Indian rupee closed nearly flat on Friday but notched its second consecutive weekly fall as a relief rally following an India-Pakistan truce proved fleeting in the face of sustained dollar
demand
from local companies and foreign banks.
On the day, outflows related to an equity
block deal
weighed on the rupee, while broad weakness in the dollar and mild exporter hedging helped keep a lid on the
currency
's losses, traders said.
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The rupee closed at 85.5050 against the U.S. dollar, nearly unchanegd from its close of 85.55 in the previous session. It declined 0.1% on the week after falling nearly 1% the previous week.
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The currency hovered in a 84.6250-85.7225 range over a holiday-shortened trading week which saw the currency
markets
react to a ceasefire between India and Pakistan, a U.S.-China trade pact, developments in trade negotiations between India and the U.S. alongside choppy price action in the U.S. dollar.
India's benchmark Nifty 50
index
hit its highest level since October this week and logged a weekly rise of over 4%. The country's the 10-year benchmark bond was in the green week-on-week as well.
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In the near-term, the rupee is likely to be range-bound between 84.80 and 85.80, said Amit Pabari, managing director at FX advisory firm CR Forex.
Traders expect the currency to be influenced by developments on a potential India-U.S. trade deal alongside the broad trajectories of the U.S. dollar and the Chinese yuan.
Asian currencies were mostly higher on the day with the Korean won leading gains. The dollar index was a tad lower at 100.7, weighed down by heightened odds of rate cuts by the Federal Reserve later this year.
The dollar is "likely to find structural
depreciation
the path of least resistance," Richard Yetsenga, group chief economist at ANZ wrote in a Friday note.
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