The Indian rupee closed stronger on Friday, supported by dollar sales from foreign banks, but snapped a two-week winning streak as a moderation in U.S. rate cut expectations and equity-related outflows weighed on the local unit earlier in the week. While the rupee drifted in a narrow range through much of Friday's session, it gained in the closing minutes aided by dollar sales from foreign banks, a foreign exchange trader at a private bank said. The rupee's recent movement has largely been driven by inflows or outflows and the choppy trend may persist in the near term, said Anindya Banerjee, head of foreign exchange research at Kotak Securities.
The Indian rupee ended little changed on Thursday, after hovering in a tight range for much of the session as positive cues from a slight pickup in its Asian peers were offset by dollar demand from foreign banks. The rupee closed at 83.1225 against the U.S. dollar, barely changed from its close at 83.1375 in the previous session. "Until the rupee's trading range breaks decisively, it's likely to keep reverting back to these levels," Gaurang Somaiya, an FX research analyst at Motilal Oswal Financial Services said, referring to the rupee's gradual decline below the 83 handle after rising to an over fourth-month peak of 82.77 on Monday.
The Indian rupee weakened slightly on Wednesday tracking its Asian peers lower as paring of rate cut bets in the United States and risk sentiment helped the dollar climb to its highest level in more than a month. Asian currencies were mostly down between 0.2% to 1%. Federal Reserve Governor Christopher Waller on Tuesday said that while the U.S. is "within striking distance" of the Fed's 2% inflation goal, the central bank should not rush to cut its benchmark interest rates.