By Dharamraj Dhutia
MUMBAI (Reuters) -The Indian rupee surrendered all of its intraday gains to end little changed on Friday as optimism over trade talks faded after an Indian minister signalled caution over ongoing negotiations.
The rupee had earlier risen to 87.6350 per dollar, its highest level since late August, breaking past the key resistance level of 87.70 on likely inflows and the lingering impact of the central bank’s persistent dollar sales near the 88 mark.
The currency ended at 87.8450, little changed from 87.8400 on Thursday.
However, things took a turn after Trade Minister Piyush Goyal said India will not rush into signing any trade agreements and will reject conditions from countries that restrict its trading choices.
“The first half of the session belonged to rupee bulls on the back of foreign inflows, but the second half saw dollar bulls claw back,” a dealer at state-run bank said.
India is negotiating a long-pending free trade agreement with the European Union, while trade talks with the U.S., which has imposed 50% tariffs on domestic goods, are also underway.
“The rupee opened higher as we head for a deal with U.S. with expectations of reducing tariffs. But with Piyush Goyal commenting that India will not accept conditions or rush through trade deals, the rupee lost most of its gains,” said Anil Bhansali, head of treasury at Finrex Treasury Advisors.
Traders also said that a pickup in equity inflows have supported the rupee in last few days. Foreign investors are net buyers of Indian shares so far in October.
Meanwhile, Asian currencies were mixed on Friday, with traders awaiting the release of September U.S. inflation data later in the day. The report was originally scheduled for October 15 and has been delayed due to a U.S. government shutdown.
Markets have fully priced in a 25 basis-point rate cut by the Federal Reserve next week, with the data expected to shape expectations for another reduction in December.
(Reporting by Dharamraj Dhutia; Editing by Harikrishnan Nair and Ronojoy Mazumdar)
