Currency watch: Rupee ends 18 paise lower at 86.70 against greenback; trade jitters and Fed uncertainty weigh on sentiment

The rupee gave up early positive aspects and settled 18 paise lower at 86.70 against the US greenback on Monday, pressured by persistent month-end greenback demand from importers and warning forward of key trade and financial coverage choices.After opening at 86.47 at the interbank international change, the home unit briefly strengthened to an intra-day excessive of 86.40 earlier than slipping to the day’s low of 86.70, the place it will definitely settled. On Friday, the rupee had closed at 86.52, PTI reported.Traders attributed the rupee’s weak spot to broad greenback energy following the EU-US trade pact and lingering uncertainty over India’s personal trade talks with the US forward of the August 1 deadline.“The Indian rupee has depreciated against the US dollar, mirroring the trend of most Asian currencies. This weakening is largely attributed to the strengthening dollar, which gained momentum following the recent EU-US trade deal,” stated Dilip Parmar, Research Analyst at HDFC Securities.Parmar added that the spot USD-INR pair might discover assist at 86.10 and resistance at 86.75 within the close to time period.The greenback index rose 0.54% to 98.17, whereas Brent crude climbed 0.85% to $69.02 per barrel amid optimism that the EU-US deal might assist future power demand.In equities, the BSE Sensex dropped 572.07 factors (0.70%) to 80,891.02 and the Nifty fell 156.10 factors (0.63%) to 24,680.90. Foreign traders web offered shares value Rs 6,082.47 crore, in line with change information.“Rupee is trading with a slight negative bias amid uncertainty ahead of the August 1 trade deal deadline,” stated Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan. “Month-end dollar demand from importers may also weigh on the domestic currency. USD-INR spot price is expected to trade in a range of Rs 86.35 to Rs 86.90.”He added that investor warning forward of the upcoming financial coverage conferences of the US Federal Reserve and the Bank of Japan may also hold stress on the rupee.Meanwhile, weak home information added to market nervousness. India’s industrial output grew simply 1.5% in June, the slowest tempo in 10 months, hit by poor efficiency in mining and energy sectors as a consequence of extra rains.India’s foreign exchange reserves additionally declined by $1.183 billion to $695.489 billion within the week ended July 18, RBI information confirmed. Reserves had reached an all-time excessive of $704.885 billion in September 2024.(*18*)