Indian Rupee: Extends weakness on month-end dollar demand : 28 Apr 2017

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The Indian rupee extended its weakness against the dollar in early trades on Friday, 28 April 2017 on increased month-end demand for the American currency from importers at the Interbank Foreign Exchange.

Moreover, the US dollar’s gain against other currencies overseas and a lower opening of the domestic equity market put pressure on the rupee.

The domestic currency opened at Rs 64.1450 against the American unit but climbed to a high of 64.06 before easing back to a low of 64.2450 so far during the day. In the spot currency market, the Indian unit was last seen trading at 64.2175.

The rupee had eased from a 21-month high to close 5 paise lower at 64.16 against the dollar in yesterday’s trade on fresh demand for the American currency from importers.

Domestic benchmark indices were trading lower in early trade on negative cues from other Asian indices. At 9:30 IST, the barometer index, the S&P BSE Sensex, was down 87.49 points or 0.29 percent at 29,942.25. The Nifty 50 index was currently down 27.85 points or 0.30 percent at 9,314.30.

Overseas, Asian shares declined as geopolitical concerns continued to loom over the markets. US President Donald Trump threatened to terminate the US trade agreement with South Korea, declaring that the five-year-old accord with a key ally was a horrible deal that has left America destroyed.

Trump also warned that conflict with North Korea was possible, even though he said he preferred peaceful resolution more.

Meanwhile, the US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.02 percent to 99.04. Overnight, the dollar traded higher against a basket of major currencies on Thursday, shrugging off the release of mostly downbeat economic data while the euro fell, after comments from European

Central Bank President Mario Draghi. The dollar continued its march higher for a second straight day, despite weaker than expected economic data as both Initial Jobless Claims and Durable Goods Orders were weaker than expected while pending Home Sales fell.

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