Rupee Closes This Much Lower On November 28

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On Wednesday, the rupee had closed lower at 71.35 against the dollar.

Snapping its two-day winning run, the rupee dropped by 27 paise to settle at 71.62 against the dollar on Thursday. The month-end dollar demand from oil importers and growth concerns ahead of release of Gross Domestic Data (GDP) data led to the depreciation in the domestic currency, analysts said. After opening higher at 71.33, the rupee lost ground during the day to touch a low of 71.67 against the dollar. On Wednesday, the rupee had closed lower at 71.35 against the dollar.

Here are 10 things to know about rupee’s movement:

  1. According to analysts, the rupee traded in a narrow range as investors are awaiting clarity on the US-China trade deal front.

  2. “Asian emerging market currencies traded mostly lower after US President Trump signed a bill backing Hong Kong protesters, spurring threat of retaliation from China and raising concerns about the prospect for an interim trade deal,” said  V K Sharma, Head PCG & Capital Markets Strategy, HDFC securities.

  3. Traders fear that the move could derail the trade talks between the two major economies.

  4. “Demand from importers ahead of the release of GDP number also affected rupee’s movement,” Mr Sharma said.

  5. The second-quarter GDP number is scheduled to be announced on Friday. Country’s economy grew at 5 per cent in the first quarter of 2019-20 — the slowest pace in over six years.

  6. According to Rushabh Maru, Research Analyst – Currency and Commodity, Anand Rathi Shares and Stock Brokers “the near term outlook of the rupee depends upon outcome of the trade talks between the US and China.

  7. “As US continued to interfere in Hong Kong issue, there are concerns that whether the deal will happen or not. 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,” Mr Maru said adding that the outcome of the trade talks will determine the direction of the rupee.

  8. Meanwhile, the 10-year government bond yield was at 6.46 per cent on Thursday.

  9. Brent crude, the global oil benchmark, fell 0.25 per cent to $63.90 per barrel in futures trade.

  10. On the domestic market front, the S&P BSE Sensex and NSE Nifty 50 indexes extended their record-breaking run. The Sensex closed 110 points or 0.27 per cent higher at 41,130 and the NSE Nifty 50 index climbed 50 points or 0.42 per cent to close at 12,151.

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