Rupee Logs 9th Straight Gain, Surges 34 Paise To Hit One-Month High Against US Dollar
Continuing its winning streak for the ninth consecutive session, the rupee closed at a one-month high of 74.70 against the US dollar by 34 paise on Tuesday, December 28, tracking positive domestic equities and a weaker dollar in overseas market.
In the interbank forex market, the local unit opened at 74.95 against the greenback and registered an intra-day high of 74.60. It saw a low of 74.95. The rupee finally closed at 74.70, registering a gain of 30 paise over the previous close.
However, Omicron concerns and firming crude oil prices moderated the price appreciation bias of the local unit to some extent.
The rupee had gained 3 paise to 75 against the US dollar in the previous session.
The domestic currency has gained 162 paise against the greenback in the last nine sessions.
Forex traders said a positive move in Indian equity indices helped the sentiment, adding that trading is likely to remain limited this week ahead of the year-end holidays.
“Rupee outperformed Asian currencies after risk-on sentiment and a weak dollar index. This has been the ninth consecutive day as state-run banks have remained sellers on the exporters’ side. Forex market volumes in light of the new year Leave remains thin,” said Dilip Parmar – Research Analyst, HDFC Securities.
Parmar further added that “the near-term outlook for USD/INR remains bearish and we may see 74.50 level over the next few days while resistance has been shifted to 74.90”.
“Over the past few sessions, volatility in the rupee has been on account of RBI intervention and weakness in the dollar index. Most of the market participants have been on the sidelines on account of Christmas and New Year holidays, suggesting that the move is a reversal. There has been thin volume,” said Gaurang Somaiya, Forex and Bullion Analyst, Motilal Oswal Financial Services.
Somaiya further added that “This week, on the global front, no major economic data is expected to be released and on the domestic front the focus will be on fiscal numbers. We expect bids in the range of USD/INR (Spot). 74.40 and 75.20”.
According to Sriram Iyer, senior research analyst at Reliance Securities, the Indian rupee appreciated against the US dollar as selling of dollars by foreign banks on the part of exporters eased concerns over the impact of Omicron coronavirus support risk sentiment.
Besides, fresh buying in global equities in the holiday trade also helped the domestic markets.
On the domestic equity market front, the BSE Sensex closed 477.24 points or 0.83 per cent higher at 57,897.48, while the broader NSE Nifty ended 147 points or 0.86 per cent higher at 17,233.25.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, fell 0.08 per cent to 96.02.
Global oil benchmark Brent crude futures rose 0.57 per cent to $79.05 a barrel.
Foreign institutional investors remained net sellers in the capital market on Monday as they sold shares worth Rs 1,038.25 crore, according to stock exchange data. PTI DRR Bali