Mumbai, Apr 6 (PTI) The rupee surrendered its initial gains and ended flat at 64.97 against the US dollar in a quiet range-bound trade today as local equities consolidated their recovery momentum.
The Indian unit largely traded sideways for most part of the session, pressured by lacklustre equities and buoyant dollar overseas ahead of US job data.
Most Asian and emerging market currencies were trading lower after US President Donald Trump ramped up his trade war rhetoric with China, seeking USD 100 billion in additional tariffs on Chinese products.
Meanwhile, expectations of robust capital inflows into the country on the back of solid macro fundamentals and prudent policies largely helped the home currency to scuttle any wild swings in the domestic currency market, a forex dealer said.
The rupee opened slightly higher at 64.92 against the US dollar from its overnight close of 64.97 at the inter-bank foreign exchange (forex) market amid positive sentiment surrounding the market following RBI’s positive outlook on growth-inflation dynamics.
The Reserve Bank of India (RBI) on Thursday kept its key policy rate unchanged, but outlined higher growth expectations for the new fiscal citing strong revival in investment activity and also lowered its inflation forecast.
However, the rupee soon lost momentum with caution creeping back as investors preferred to stay on the sidelines ahead of the release of official US monthly jobs report.
After moving sideways in a very narrow range between 64.92 and 65.03, the local unit finally settled unchanged at 64.97 against the US currency.
For the week, the rupee rebounded by a smart 21 paise against the US dollar after two straight weeks of decline.
The RBI, meanwhile, fixed the reference rate for the dollar at 64.9884 and for the euro at 79.5133.
Globally, the dollar traded firmly higher against a basket of other major currencies as investors awaited monthly US payrolls data that could alter inflation expectations in the world’s biggest economy.
The dollar index, which measures the greenback’s value against a basket of six major currencies, was up at 90.17 after reclaiming a five-week top of 90.60 in early trade.
Meanwhile, crude oil prices dropped slightly after Trump’s threat of new tariffs on China.
In cross currency trade, the home currency strengthened against the pound sterling to finish at 90.96 from 91.25 and edged higher against the euro to end at 79.50 as compared to 79.68 yesterday.
It also gained further ground against the Japanese yen to close at 60.53 per 100 yens from 60.68 earlier.
Elsewhere, both euro and pound sterling traded little changed against the greenback ahead of the key US jobs data.
In forward market today, premium for the dollar showed a mixed pattern of trading owing to lack of market moving factors.
The benchmark six-month forward premium payable in August moved down to 102-104 paise from 103.50-105.50 paise, while the February 2019 contract ended steady at 223-225 paise.
This is published unedited from the PTI feed.