Rupee ends slightly higher at 85.52/$; falls for second straight week

The Indian Rupee reduced early advances on Friday to close slightly up due to a decline in the dollar index and crude oil prices. The local currency finished 3 paise up at 85.52 after concluding at 85.55 against the dollar on Thursday, as per Bloomberg data. The currency relinquished its initial advances as it started 25 paise up against the dollar.

On a weekly basis, the currency registered a decline for the second consecutive week, decreasing by 0.16 percent.

The dollar index’s decline continued after the US confirmed it is not attempting to devalue the dollar within trade agreements. The Dollar Index, which assesses the greenback relative to a group of six key currencies, was down 0.12 percent at 100.75.

The dollar index declined as the US 10-year yield dropped to 4.42 percent following unexpected negative US data this week, strengthening predictions that the Federal Reserve will lower rates more than three times in 2023, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP.

Recent worldwide data suggests a potentially weakening US economy, which might further pressure the dollar and offer medium-term backing to the rupee, as stated by Amit Pabari, managing director at CR Forex Advisors.

In the meantime, the currency’s fluctuations follow the release of the country’s trade statistics. India’s goods trade deficit expanded notably to $26.42 billion in April from $21.5 billion in March, as a 9 percent year-on-year rise in exports was surpassed by a much more substantial increase in imports. In April, exports reached $38.5 billion, while imports increased to $64.91 billion, showing a rise of 19.1 percent compared to the previous year.