Rupee slips 3 paise to close at 89.70 against US dollar

Mumbai: The rupee ended Monday’s session in negative territory, slipping 3 paise to close at 89.70 (provisional) against the US dollar, as the positive cues from domestic equity markets were offset by a recovery in crude oil prices.

Uncertainty over the progress of US–India trade negotiations also weighed on investor sentiment.

At the interbank foreign exchange market, the rupee opened at 89.53 and touched an intraday high of 89.45, marking a 22-paise gain from its previous close. However, the domestic unit failed to sustain its gains and weakened towards the end of the session. On Friday, the rupee had appreciated 53 paise to close at 89.67 against the greenback.

Forex traders said a weak US dollar index provided some support to the rupee at lower levels, but rising crude oil prices capped any meaningful upside. The dollar index, which measures the greenback against a basket of six currencies, was down 0.08 per cent at 98.52.

Brent crude, the global oil benchmark, was trading 0.86 per cent higher at USD 61 per barrel in futures trade, adding pressure on the domestic currency.

On the equity front, benchmark indices ended sharply higher, with the Sensex jumping 638.12 points to settle at 85,567.48 and the Nifty rising 206 points to close at 26,172.40. Foreign Institutional Investors bought equities worth Rs 1,830.89 crore on Friday, according to exchange data.

Market participants are also closely tracking macroeconomic cues from the United States. Analysts said the rupee may trade with a positive bias amid a weak US dollar and strong domestic equities, though delays in a potential trade deal between India and the US could continue to weigh on the currency at higher levels.

India’s foreign exchange reserves increased by USD 1.689 billion to USD 688.949 billion for the week ended December 12, as per Reserve Bank of India data, providing additional comfort to the external sector.