Rupee Rises 26 Paise To 70.88 Against US Dollar In Early Trade

The Indian rupee appreciated by 26 paise to 70.88 against the US dollar in early trade on Friday as easing trade tensions between US and China strengthened investor sentiments. Forex traders said fall in global crude oil prices and fresh foreign fund inflows also enthused investors.

US Treasury Secretary Steven Mnuchin on Thursday said that US wants to make 'meaningful progress' in China trade talks. At the interbank foreign exchange, the rupee opened at 70.94, then gained further ground and touched a high of 70.88, registering a rise of 26 paise over its previous close.

The domestic unit however could not hold on to the gains and was trading at 70.99 against the dollar at 10:01 hours. On Thursday, the rupee had settled for the day at 71.14 against the US dollar.

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China on Thursday welcomed US President Donald Trump's "goodwill" gesture to postpone a planned tariff hike on Chinese products, as the two countries warmed up to each other ahead of next month's talks to end their bruising trade war.

President Trump on Wednesday had said that he had delayed his proposed increased tariffs on USD 250 billion worth of Chinese goods from October 1 to October 15. Forex traders said, easing crude oil prices supported the local unit.

Brent crude futures, the global oil benchmark, eased 0.28 per cent to trade at USD 60.21 per barrel. Meanwhile, domestic bourses opened on a cautious note on Friday with benchmark indices Sensex trading 19.29 points lower at 37,084.99 and Nifty down 1.50 points at 10,981.30.

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Strengthening of the American currency vis-a-vis other currencies overseas also weighed on the local unit. The dollar index, which gauges the greenback's strength against a basket of six currencies, rose marginally by 0.02 per cent to 98.32.

Foreign institutional investors (FIIs) remained net buyers in the capital market, putting in Rs 783.55 crore on Thursday, according to provisional exchange data. The 10-year government bond yield was at 6.66 per cent on Friday.