The rupee recovered by 20 paise against the US dollar to close at 69.91 on Friday. With that, the rupee concluded the week with a total gain of 24 paise. Weakness in the dollar, set for its biggest weekly decline since March, came ahead of a speech by Federal Reserve Chairman Jerome Powell on Friday at the Jackson Hole, Wyoming, conference of central bankers. US President Donald Trump had earlier this week said he was "not thrilled" with the Federal Reserve under his own appointee for raising interest rates.
With the rupee not far from its all-time closing low of 70.15 registered last week, analysts expect the rupee to hover around 70 levels against the greenback for an extended period.
"With oil prices showing signs of strengthening, given our current account deficit and US-China trade talks not making much headway, we expect 70.00-70.40 to be the new normal for dollar-rupee," Salil Datar, CEO and executive director, Essel Finance VKC Forex, told NDTV.
In the oil market, prices took support by signs that US sanctions on Iran are already reducing global crude supply. Benchmark Brent was on track for gains of almost 5 per cent this week.
"The rupee could range between 69:90-70.50 levels unless USD/CNY (Chinese yuan) gets pegged closer to 7.0 levels which can further weaken the rupee," Mr Datar added.
Against a basket of six major currencies, the dollar stood at 95.516, down 0.3 per cent on the day.
Meanwhile, State Bank of India (SBI) group economic advisor Soumya Kanti Ghosh said that any sudden appreciation or depreciation of the rupee is not good as it adds volatility in the market.
The rupee has experienced an orderly depreciation as it moved from 64 to a dollar to 70 over a span of five to six months. Whether the rupee touches the 72 level against the greenback, it hardly matters, he said.
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