The Indian rupee remained under intense selling pressure and witnessed a free fall for the fourth straight week, plunging to hit a fresh life-time low against the US dollar before managing a small recovery.
The rupee continued its bullish trend for the second day, rising 17 paise to end at 72.20 against the US dollar on sustained selling of the American currency even as local equities witnessed a high volatility.
The British pound tumbled 1.5 percent on Friday and headed for its biggest daily drop this year against the dollar after Prime Minister Theresa May said Brexit talks with the European Union had reached an impasse and new plans were needed.
The dollar rebounded from early lows and edged higher against most of its rivals on Friday but was still on track for its biggest weekly drop in seven months as stronger equity markets and rising bond yields fueled a rush to buy riskier assets.
The US dollar ended cheaper against the rupee at 72.20/21 per dollar but the pound sterling also finished higher at Rs 95.28/30 per pound at the close of the Interbank Foreign Exchange (forex) market.
As negotiations become fraught before Britain’s exit from the European Union in March, tensions of a different kind are surfacing on the currency markets — derivatives activity is rising sharply as investors bet on a weaker sterling.
Dollar struggled near 2-1/2 month lows, while the yen also sagged on reduced safe haven demand amid a switch in investors’ view that the Sino-U.S. trade conflict would not lead to an immediate global shock.
Continuing its uptrend, the rupee firmed by another 53 paise to trade at over a two-week high of 71.84 against the US dollar in early trade Friday at the Interbank Foreign Exchange on increased selling of the American currency by exporters and banks.
The dollar fell to a seven-week low against a basket of major currencies on Thursday as concerns about the impact of a trade row between China and the United States ebbed.