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Indian Rupee: Depreciates Amid Weak Local Equities
17-Jan-20   10:51 Hrs IST

The Indian rupee depreciated against the dollar in early trades on Friday, 17 January 2020 tracking weak opening in domestic equities and foreign fund outflows. Foreign institutional investors (FIIs) remained net sellers in the capital markets, as they sold shares worth Rs 395.24 crore on Thursday, as per provisional data. Rise in crude oil prices and foreign fund outflows also weighed on the domestic unit.

The domestic currency opened at Rs 70.98 against the dollar and dipped to a low of 71 so far during the day. In the spot currency market, the Indian unit was last seen trading at 70.97. The Indian rupee on Thursday had closed at 70.93 against the dollar.

Rupee pared its early gains despite the US-China signing the phase-1 trade deal, as huge uncertainty still remains, which might make it difficult for China and the US to reach a comprehensive trade deal. The United States on Wednesday signed the first phase of a trade deal with China, which President Donald Trump described as historic, concluding more than a year of tough negotiations between the two largest economies of the world.

Domestic indices were trading flat in early trade. At 9:20 IST, the barometer index, the S&P BSE Sensex, was down 11.80 points or 0.03% at 41,920.76. The Nifty 50 index was down 6.80 points or 0.06% at 12,348.70.

Overseas, Asian stocks were trading higher on Friday after global stock indexes and Wall Street posted more records, with strong corporate earnings and upbeat US economic data adding to optimism after China and the US signed a partial trade deal. In US, stocks rallied again on Thursday, with all three benchmark indexes closing at new records, following the signing of a trade truce between the US and China on Wednesday and Senate approval of a new trade deal between the US, Mexico and Canada on Thursday.

Meanwhile, the US Dollar Index Futures that tracks the greenback against a basket of other currencies was slightly lower, down 0.02% to 97.30. The index has remained strong after falling at the beginning of the year. The dollar and the Chinese yuan remained steady a day after China and the U.S. signed a phase one trade deal aimed at easing tensions between the two largest economies in the world.

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