Rupee Closes Flat After Weak Open

The Indian rupee closed flat at 85.63 against the US dollar on Monday in comparison to its previous close of 85.64 on Friday. This comes amid various global and domestic economic factors influencing the currency markets.

The domestic currency opened 3 paise weaker at 85.67 against the US dollar on Monday.

"Overall, markets are cautious ahead of key US data and global trade talks that could shape near-term risk appetite," said Ritesh Bhanshali, director, Mecklai Financial Service Ltd. He expects the rupee to face resistance at 85.80 and 86.10 levels and key support lies at 85.30 and 84.70.

Additionally, the US dollar edged lower around 99 as the market turned cautious ahead of a busy week of US inflation data and renewed US-China trade negotiations in London.

Friday’s stronger-than-expected US non-farm payrolls tempered expectations of imminent Fed rate cuts, while ECB officials reiterated a cautious stance with Lagarde emphasising restrictive policy to ensure price stability amid tariff risks, added Bhansali.

On Monday, crude extended decline for the fourth day with Brent crude — the global benchmark for crude oil — falling 0.08% to $66.42 as trade talks between US-China indicated potential reduced global tensions. Oil prices posted their first weekly gains and were up in the current week with Brent at $ 66.41 per barrel.

In the last two months crude prices have tumbled to four year low amid US President Donald Trump's tariff wars. While it may have recovered some of the losses, it still remains almost 11% lower this year as trade conflicts persist and OPEC+ has changed its strategy and abandoned the earlier strategy of defending higher prices by curbing output.