Rupee firms up 5 paise at 71.71 vs US dollar

New Delhi, Nov 22 (PTI) The Indian rupee furthered its gains by 5 paise to close at 71.71 against the US dollar on Friday, helped by sustained foreign fund inflows and lower crude oil prices.

Starting on a steady note, the rupee went through bouts of volatility during the session and touched an intra-day low of 71.87 against the US dollar. The domestic unit found some stability later and finally settled at 71.71, up 5 paise over its previous close.

On a weekly basis, the Indian currency gained 7 paise. Experts attributed the initial bouts of volatility in the forex market to lack of guiding factors on the domestic front and uncertainty with regard to ongoing global trade tariff tussle.

'This week USD/INR remained pretty range bound, while conflicting and mixed messages by the Trump administration kept rupee on an edge. A long pause will further weaken risk appetite,' said Rahul Gupta, Head of Currency Emkay, Global Financial Services.

Gupta further said that 'for the next week, we expect USD/INR spot to trade within 71.55-72.25 range. 72 will act as a strong resistance, until and unless there is clarity over trade deal'.

In a positive sign for the domestic market, foreign investors have continued with their bullish outlook and bought equities worth Rs 305.72 crore on Friday.

A day before, they had purchased shares worth Rs 5,023.54 crore from the capital markets on a net basis, provisional data showed.

'Next week, focus will be on second quarter GDP numbers and weaker-than-expected number could keep the rupee weighed down against the US dollar. For the next couple of sessions, we expect that volatility for the rupee could be confined to a range of 71.50 and 72.05,' said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services Private Ltd.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.04 per cent to 98.02.

Meanwhile, the 10-year government bond yield was at 6.51 per cent on Friday.

Brent crude futures, the global oil benchmark, fell 0.23 per cent to trade at USD 63.82 per barrel.

On the equity front, the 30-share index ended 215.76 points, or 0.53 per cent, lower at 40,359.41. It hit an intra-day low of 40,276.83 and a high of 40,653.17. Similarly, the broader NSE Nifty settled 54 points, or 0.45 per cent, down at 11,914.40.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.7996 and for rupee/euro at 79.5152. The reference rate for rupee/British pound was fixed at 92.8130 and for rupee/100 Japanese yen at 66.12. PTI DRR MKJ