Indian rupee posts steepest weekly drop in a month, nears 91 per dollar

MUMBAI: The Indian rupee slipped on Friday to post its steepest weekly fall in a month as likely portfolio outflows and lingering geopolitical tensions weighed on the currency, pushing it close to the 91-per-dollar mark.

The Indian rupee closed at 90.9825 per dollar, down 0.3% on the day and 0.4% for the week.

Central bank intervention, including on Friday, helped keep the currency above 91 despite broad-based dollar demand from importers and paring of bullish positions, traders said.

There was a meaningful supply of dollars from the central bank in the market today, a trader at a Mumbai-based bank said, adding he expected the Indian rupee to trade between 90.50 and 91.50 in the near term.

Asian currencies were mixed, while the dollar index was headed for its best weekly gain, supported by stronger-than-expected economic data, a more hawkish Federal Reserve outlook and tensions between the U.S. and Iran.

Amid a massive U.S. military buildup in the Middle East that has fueled fears of a wider war, U.S. President Donald Trump said negotiations with Iran to end the tense standoff were going well but demanded that Tehran reach a “meaningful” agreement.

“Large-scale US military deployment is raising the perceived risk of an imminent strike on Iran. The dollar acts more efficiently as a safe haven when geopolitical risk lifts crude prices, yet markets remain reluctant to fully price this in,” analysts at ING said in a note.

Brent crude oil prices were on course to end the week higher by over 5% and were last hovering at about $71.5 per barrel.