Snapping its three-session downtrend, the rupee today managed to end higher by 5 paise at 65.12 against the US currency on fresh bouts of dollar selling by banks and importers amid growing trade war concerns. The Indian currency gathered some buying interest in the wake of BJP's strong showing in the country's North East region ahead of the national election in 2019. A panic gripped currency and financial markets worldwide after US President Donald Trump revealed his plans impose severe tariffs on imports of steel and aluminium, sparking fears of a potential global trade war. Though, the rupee washed out its early strong gains in tandem with local equities, but eventually settled higher. The home currency hit a high of 64.93 in early trade. Weak dollar overseas against some other Asian currencies predominantly helped the rupee to bargain better, reversing downtrend pressure. Highly bullish economic data releases were largely overshadowed by the much anticipated aggressive tightening policy by the Federal Reserve. India's gross domestic product (GDP) grew 7.2 per cent in the October-December quarter, showing a sustained pick-up in growth recovery in an economy that was hit hard by issues related to the roll out of the Goods and Services Tax (GST) and lingering impact of demonetisation. In the meantime, domestic stocks suffered heavy losses with the key indices sliding to fresh two-week low as investor sentiment took a hit on heightened fears of a global trade war in the face of US president's plans to impose hefty tariffs on steel and aluminium imports, which could trigger serious economic repercussions. The flagship BSE-sensex tumbled 300 points to end at 33,746.78, while Nifty dived nearly 100 points at 10,358.85. Global crude prices fell in line with broad-based market sentiment trends, though the pace of fall was limited ahead of a meeting between OPEC and US shale firms in Houston, raising expectations that oil producers would discuss further how to clear a global oil glut. Brent crude futures were trading at USD 64.63 a barrel in early Asian trading. The rupee resumed higher at 65.10 against Thursday's close of 65.17 at the inter-bank foreign exchange market (forex) here. It strengthened further to hit a high of 64.93 in mid morning deals. However, the local unit succumbed to some dollar pressure in the fag-end trade, relinquishing all early strong gains to end marginally higher at 65.12, showing a gain of 5 paise, or 0.08 per cent. It had depreciated by a staggering 96 paise in recent sell-offs. The RBI, meanwhile, fixed the reference rate for the dollar at 65.0530 and for the euro at 80.0347. Globally, the US dollar remained on the back foot after President Trump announced plans last Thursday to impose heavy tariffs on steel and aluminium imports, raising fears over a trade war with major trade partners such as China, the European Union and Canada. The dollar index, which measures the greenback's value against a basket of six major currencies, was up at 90.07 in early trade. However, in cross-currency trades, the rupee fell back against the pound sterling to end at 89.92 per pound from 89.54 and retreated against the euro to finish at 80.12 from 79.41. The local unit remained under pressure against the Japanese yen to settle at 61.70 per yens from 61.05 earlier. Elsewhere, the euro pared early steep losses to trade little changed against the US dollar largely ignoring the the ongoing political uncertainty gripping after the Italian parliamentary elections resulted in a political gridlock. The British pound, however, remained under pressure against the backdrop of increasing uncertainty around the Brexit negotiations and PM Mays government despite upbeat UK PMI data outcome. In forward market today, premium for dollar showed a steady trend owing to lack of market moving factors. The benchmark six-month forward premium payable in August and the fag-forward February 2019 contract both closed unchanged at 125-127 paise and 242-244 paise, respectively.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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