MUMBAI: The Indian rupee slipped on Thursday as a combination of bullish position unwinding and dollar strength pushed the local currency to near the 86 level against the U.S. dollar.
The rupee slipped to 85.9125 against the U.S. dollar before paring losses to an extent. It was last quoted at 85.85, down 0.3% on the day.
The currency is now on track for its sixth decline in seven sessions, having hit 84.78 last Monday.
“The market is backing off earlier long rupee bets,” said a currency trader at a bank. “You can see that in the price action. Its not helping that the dollar overall has found a bit of footing and we are seeing equity outflows.”
Foreign investors pulled out more than $300 million from domestic equities on Wednesday, according to preliminary data, adding to outflows of more than $1 billion in the previous three sessions.
Meanwhile, the dollar index inched higher, extending Tuesday’s advance that was underpinned by an unexpected rise in U.S. job openings.
More labour market data is due through the week, with the key highlight being Friday’s non-farm payrolls report for May — a key input for assessing the Federal Reserve’s interest rate path.
Asian currencies were mostly weaker, with sentiment dominated by developments around trade negotiations between the U.S. and its partners.
The Trump administration has set a Wednesday deadline for countries to submit their best trade offers.
President Donald Trump is expected to speak with Chinese President Xi Jinping this week, according to the White House.
The call comes amid renewed tensions, with both sides accusing each other of breaching last month’s agreement to roll back certain tariffs.
Comments
Comments are closed for this article.