Indian Rupee: Edges Lower On Increased Dollar Demand

The Indian rupee depreciated against the dollar in early trades on Monday, 25 June 2018 as demand for the American unit from importers and banks picked up. The domestic equity markets opening lower also put pressure on the rupee but the dollar falling to a two-week-low against the yen on global trade concerns capped the losses.

The domestic currency opened at Rs 68.05 against the dollar and weakened by 29 paise to a low of 68.13 so far during the day. In the spot currency market, the Indian unit was last seen trading at 68.0950. On Friday, the rupee had continued its rally for the third straight session, strengthening 14 paise to end at 67.84 against the dollar amid sustained unwinding of American currency by exporters.

Domestic stocks edged lower in early trade on negative Asian stocks. At 9:25 IST, the barometer index, the S&P BSE Sensex, was down 54.01 points or 0.15% at 35,635.59. The Nifty 50 index was down 17.25 points or 0.16% at 10,804.60. Overseas, Asian stocks fell as investors assessed prospects for continuing trade tensions between US and China. US stocks climbed on Friday, 22 June 2018 following gains in Europe as OPECs plans to boost output less than some investors had anticipated sent oil on a tear.

Meanwhile, the dollar fell to a two-week low against the yen on Monday as a latest flare-up in global trade concerns dented investor risk appetites and drove down U.S. yields. The dollar index against a basket of six major currencies stood at 94.559, having retreated from 95.529, its highest level since July 2017, scaled early on Friday. The greenback had climbed to the 11-month peak as higher U.S. yields underlined the divergence in monetary policies between the United States and Europe.