The Indian rupee has recovered marginally from the day’s low but trading lower at 71.79 per dollar, with domestic equity market witnessing selling pressure.
It touched a low of 71.84 after a flat opening at 71.61 per dollar versus previous close 71.60.
On November 28, the rupee declined 25 paise to end at 71.60 against the US currency due to month-end dollar demand from oil importers and ahead of the release of GDP data to release later today.
The Sensex was down 341.01 points or 0.83% at 40789.16, and the Nifty was down 98.20 points or 0.81% at 12053.
The near term outlook of the rupee depends upon the outcome of the trade talks between the US and China. As the US continued to interfere in the Hong Kong issue, there are concerns that whether the deal will happen or not,” said Rushabh Maru, Research Analyst – Currency and Commodity, Anand Rathi Shares and Stock Brokers.
“If the trade talks fail then the US will go ahead with tariffs on Chinese goods from December 15. There is also a threat of Yuan devaluation if the trade talks fail. Hence, the outcome of the trade talks will determine the direction of the rupee,” he added.
Oil prices were steady on Friday in quiet trade with the US Thanksgiving holiday underway, while investors awaited a meeting of OPEC and its allies next week that may result in the extension of a production cut agreement to support the market.
The dollar headed for its highest weekly finish against the safe-haven yen since May on Friday, as data showing the US economy on a firm footing prompted investors to scale back rate-cut bets.
The dollar-rupee December contract on the NSE was at 71.80 in the previous session. Open interest increased 4.22% in the previous session, said ICICIdirect. We expect the USD-INR to find supports at lower levels. Utilise downsides in the pair to initiate long positions, it added.