Forex

Rupee weakens to 65.19

Agencies Mumbai | Updated on March 09, 2018 Published on March 09, 2018

The rupee strengthened by 4 paise to 65.10 per dollar on mild dollar selling by exporters and banks.

The rupee weakened to 65.19 as the dollar jumped half a per cent against the yen on Friday as hopes of a breakthrough in the North Korean nuclear standoff rose and after the Japanese central bank reaffirmed its decision to stick to its ultra easy policy stance in the coming months.

The domestic unit opened at 65.10 at the interbank forex market today. It hovered in a range of 65.19 and 65.05 before quoting at 65.18, down 4 paise at 4.45 pm local time.

At the outcome of a two-day monetary policy meeting on Friday, the Bank of Japan stuck to its dovish stance. While sounding optimistic on growth, Governor Haruhiko Kuroda reiterated there would be no plan to change monetary policy before the 2 per cent inflation target is met.

Also fanning broad-based risk appetite was news that US President Donald Trump was prepared to meet North Korea's Kim Jong Un in what would be the first face-to-face encounter between the two countries' leaders. That could potentially mark a major breakthrough in nuclear tensions with Pyongyang.

The news helped dollar/yen, which has fallen 7 per cent since the start of the year on concerns that the outbreak of a trade war would derail a global growth recovery, to bounce sharply on Friday. The yen also fell 0.5 per cent and 0.7 per cent against the euro and sterling respectively.

Yesterday, the rupee had lost 25 paise to 65.14 on fresh bouts of demand for the American currency from importers and banks amid rising uncertainty stemming from US President Donald Trump’s possible trade war.

In global trade, the US dollar had strengthened against the euro after European Central Bank President Mario Draghi signalled that any policy normalisation in the euro zone would be very gradual and President Trump formally announced tariffs on steel and aluminium imports. US trade partners Canada and Mexico will be exempted from the levies for now, leading their currencies to strengthen.

Meanwhile, the Sensex ended lower by 44.43 points or 0.13 per cent at 33,307.14 and the Nifty down by 15.8 points or 0.15 per cent at 10,226.85 as investors stayed on the sidelines due to lack of clarity on the US tariff on steel and aluminium imports.

Published on March 09, 2018
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