Rupee gains 39 paise on likely US trade deal, dollar sales
dollar sales
from
foreign banks
, traders said.
The rupee closed 39 paisa stronger at 85.31 per dollar, up from its previous close of 85.70 to $1, LSEG data showed. The rupee had appreciated to 85.18 to $1 during the day, its best level since late May, but likely intervention from the
Reserve Bank of India
(RBI) capped excess appreciation in the currency.
Asian currencies mostly rose, while the dollar index remained steady at 96.8, ahead of US non-farm payroll data for cues on the future path of the Federal Reserve policy rates.
"Once the rupee appreciated past 85.45 to $1 levels, stop losses were triggered for many institutions, aiding the rupee. Foreign inflows were also seen on Thursday," a trader from a private sector bank said on condition of anonymity. The rupee traded in the range of 85.64 and 85.18 to $1 on Thursday.
"Positive sentiments on trade deal allowed rupee to trade up to 85.18 to $1, where RBI likely bought dollars, taking the currency towards 85.35 to $1 levels. Today (on Thursday) the market was heavily long on the rupee," said Anil Bhansali, head of treasury at Finrex Treasury Advisors.
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A trade deal with India could strengthen the rupee around 85 to $1 levels, but further appreciation would depend on intervention by the RBI, traders said. Market participants expect the rupee to trade within the range of 85 and 85.50 on Friday.
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