Rupee closes nearly unchanged at 83.48 against dollar

The rupee closed nearly unchanged as on Friday due to dollar demand from local oil companies and ahead of the US employment data expected later today.

The rupee closed at 83.48/$1 on Friday, versus the previous close of 83.46/$1, LSEG data showed. On a weekly basis, the local currency depreciated 0.1%

The US Non Farm Payroll (NFP) data is expected today, which will influence rate cut expectations by the Federal Reserve.

The dollar index fell 0.2% to a three week low and touched 104.95 due to pressures from the Euro and the British Pound.

Brent crude oil traded at $87.47 per barrel on Friday, up from $86.86 yesterday, Reuters data showed. Oil marketing companies that are buying crude in anticipation that it might rise further, traders said.

A rise in crude oil prices poses upside risks to Indias’ trade deficit and inflation as the country is a major importer of the commodity.

The 10-year benchmark government bond yields closed at 6.99% on Friday, unchanged from the previous close, CCIL data showed.

The Reserve Bank of India conducted an auction of government securities worth Rs. 28,000 crores on Friday.

“The auction cut off went well. A lot of participants were worried that the price cut-off would be on the lower side. The NFP data will now decide if we are going at 6.95% yields, or if yields will increase ”, a trader at a primary dealership said.

Yields for the three year bond were at 6.95%, for the 15 year bonds were at 7.03% and for the 20 year bond were at 7.08%, RBI data showed.

Nonfarm payrolls data likely increased by 190,000 jobs last month after surging by 272,000 in May, a Reuters poll showed.

RBI data showed that the central bank absorbed Rs 1.33 lakh crore from banks as on July 4. An absorption of funds by the RBI implies surplus liquidity with banks. Traders are expecting this surplus liquidity to sustain till mid August due to government bonds maturing at the end of this month.