Rupee pares initial gains, settles 5 paise up at 85.25 against US dollar

Mumbai, Apr 4 (PTI) The rupee pared its initial gains and settled for the day higher by 5 paise at 85.25 (provisional) against the US dollar on risk aversion in global markets amid trade tariff worries.

Forex traders said during the day, the domestic unit gained on weak US dollar index and a sharp decline in crude oil prices, while weak domestic markets and foreign fund outflows capped sharp gains for the local unit.

At the interbank foreign exchange, the rupee opened at 85.07 then touched an intra-day high of 84.96 and a low of 85.34 against the greenback. The unit ended the session at 85.25 (provisional) against the dollar, registering a gain of 5 paise from its previous closing level.

On Thursday, the rupee settled at 85.30, higher by 22 paise against the US dollar as the greenback weakened against its major peers after President Donald Trump unleashed reciprocal tariffs on about 60 countries.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.42 per cent lower at 101.64, on disappointing services PMI data and concerns over trade tariffs, raising worries over economic growth in the US.

Brent crude, the global oil benchmark, fell 0.84 per cent to USD 69.55 per barrel in futures trade, hit by twin shocks of Trump's tariffs and an OPEC+ decision to increase output faster than previously announced.

"We expect the rupee to trade with a negative bias on risk aversion in the global market amid trade tariff worries and FII outflows. However, a weak US dollar and decline in crude oil prices may support the rupee at lower levels," said Anuj Choudhary -- Research Analyst at Mirae Asset Sharekhan.

Traders may take cues from US non-farm payrolls data. USDINR spot price is expected to trade in a range of 84.95 to 85.55, Choudhary said.

In the domestic equity market, the 30-share BSE Sensex fell 930.67 points, or 1.22 per cent, to settle at 75,364.69, while the Nifty declined 345.65 points, or 1.49 per cent, to close at 22,904.45 points.

Foreign institutional investors (FIIs) offloaded equities worth Rs 2,806.00 crore on a net basis on Thursday, according to exchange data. PTI DRR TRB

Source: PTI