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Rupee ends marginally lower against dollar on Friday

25 Jan 2019 Evaluate

Erasing all of the initial gains, Indian rupee ended weaker against dollar on Friday, due to fresh demand for the American currency from banks and importers. Traders remained concerned after Global rating agency Moody’s said that the government policies to support the incomes of small enterprises and low-income households ahead of Lok Sabha elections will make fiscal consolidation harder. It further said that the fiscal deficit may touch 3.4 per cent of gross domestic product (GDP) for year ending March 2019, breach the target of 3.3 per cent. However, losses remained capped with FIEO stating that the tariff war between the US and China is benefitting India as its exports to the neighboring country have increased by about 32 per cent during the June-November 2018 period to $8.46 billion. Exports to China had stood at $6.37 billion in June-November 2017. Growth in exports to China is beneficial for India as it has huge trade deficit with the neighboring country. On the global front, euro was down in the forex markets as trading got underway on Friday following a warning from the European Central Bank.

Finally, the rupee ended at 71.17, 10 paise weaker from its previous close of 71.07 on Thursday. The currency touched a high and low of 71.25 and 70.95 respectively. The reference rate for the dollar stood at 71.10 and for Euro stood at 80.49 on January 25, 2019. While the reference rate for the Yen stood at 64.74, the reference rate for the Great Britain Pound (GBP) stood at 93.23.

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