Currency Overview

The Rupee closed stronger than its opening on Friday on the back on sustained inflow even as investors remain worried over rise in tensions between the US and China and surge in coronavirus cases globally. However, expectations of foreign fund inflows into Indian companies and global weakness in US dollar may support the currency during the day. Unemployment claims data released in the US stoked concerns that the reimposition of lockdowns in several parts due to a spike in coronavirus cases may have caused a slowdown in the jobs market. Those claiming unemployment benefits for the week ended Jul 11 fell just by 10,000 to 1.3 mln, which was a slower pace of fall than reported in previous weeks. Meanwhile, the diplomatic tensions between the world's two larges economies seems to be rising as US President Donald Trump's administration is reportedly considering a travel ban on members of the Chinese Communist Party and their families. The US also said that it would ban travel for employees of Chinese technology group Huawei and other companies, citing human rights violation. Investors, however, are hopeful that there's a possibility of a COVID-19 vaccine by the end of the year as reports said several companies are making quick progress in the development of a vaccine. Astrazeneca, the potential virus vaccine by Oxford University could potentially be ready for regulatory approval by October. For the Rupee, sales of the greenback likely for foreign portfolio investors who sought to participate in YES Bank's follow-on public offer of 150 bln rupees, supported the rupee, dealers said. The offer amounts to around $2 bln at prevailing exchange rates.