Rupee weakens against US dollar on rise in crude oil prices

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Mumbai: The Indian rupee on Thursday weakened against the US dollar after international crude oil prices jumped over 10% as the Organization of the Petroleum Exporting Countries (Opec) agreed to cut oil output.

The home currency opened at 68.49 against the US dollar. At 9.15am, the rupee was trading at 68.51 a dollar, down 0.16% from its previous close of 68.39. So far this year, it has fallen 3.4%.

The Opec agreed on Wednesday for its first oil output reduction since 2008 after de-facto leader Saudi Arabia accepted “a big hit” and dropped a demand that arch-rival Iran also slash output. The deal also included the group’s first coordinated action with non-Opec member Russia in 15 years, Reuters reported.

India’s benchmark Sensex index was trading at 26,742.75 points, up 0.34% or 89.94 points from its previous close. So far this year, it has risen 2%.

India’s economy witnessed a marginal acceleration, growing at 7.3% in the second quarter of 2016-17 against 7.1% in the first quarter and 7.6% in the corresponding quarter last year.

Traders are cautious ahead of the US payroll data on Friday, Italian referendum scheduled for Sunday and mid-December US Federal Reserve policy.

The benchmark 10-year government bond yield was trading at 6.229%, compared to Wednesday’s close of 6.247%. Bond yields and prices move in opposite directions.

So far this year, foreign institutional investors (FIIs) have bought $4.21 billion in equities and sold $3.74 billion in debt.

Asian currencies were trading mixed. South Korean won was down 0.48%, Philippines peso 0.25%, Indonesian rupiah 0.21%, Taiwan dollar 0.14% and China renminbi 0.08%. However, Singapore dollar was up 0.12%, China offshore 0.12% and Japanese yen rose 0.11%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 101.5, down 0.01% from its previous close of 101.50.