Rupee recovers by 28 paise on weak dollar; ends 4-day losing run

Rupee recovers by 28 paise on weak dollar; ends 4-day losing run
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The rupee strengthened by 28 paise to close at 74.73 against the on Monday, ending its four-session losing run on the back of weakness in the greenback and positive domestic equities.

A fall in crude oil prices and improved risk appetite supported the local unit even as worries over surging COVID-19 cases restricted the gains.

“The appreciated amid weakness in dollar and rise in risk appetite in the global sentiments improved as recent manufacturing and services PMI data across major countries in world showed expansion in activity signalling economic recovery from the pandemic,” said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas.

At the interbank forex market, the local unit opened at 74.81 against the greenback and witnessed an intra-day high of 74.67 and a low of 74.88.

It finally ended at 74.73 against the American currency, registering a rise of 28 paise over its previous closing.

In the four sessions to Friday, the rupee had declined by 66 paise or 0.89 per cent on worries over a record surge in coronavirus cases and subsequent lockdowns in various parts of the country.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.08 per cent to 90.78.

However, sharp gains in the rupee were prevented on concern that rising COVID-19 cases in India and lockdown restriction in some states may hurt economic recovery, Mukadam said.

The rupee may trade in the range of 74.30 to 75.50 in next couple of sessions, he added.

Meanwhile, Brent crude futures, the global oil benchmark, fell 1.86 per cent to USD 64.88 per barrel.

On the domestic equity market front, the BSE Sensex ended 508.06 points or 1.06 per cent higher at 48,386.51, while the broader NSE Nifty advanced 143.65 points or 1 per cent to 14,485.00.

Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 1,360.76 crore on Friday, according to exchange data.

“The rupee appreciated against the dollar tracking broad decline in the dollar index and rebound in equities,” said Sriram Iyer Senior Research Analyst at Reliance Securities, adding that the local unit witnessed its biggest single session rise since April 16, 2021.

Meanwhile, investors will now keenly await the US Federal Reserve and Bank of Japan meetings this week.

According to Dilip Parmar, Research Analyst, HDFC Securities, started the week on positive note following rebound in risk assets.

“The Dollar Index continued its downward trajectory, signals that the market is pricing in dovish US Fed’s stance this week despite recent upbeat economic data,” he said and added that the spot USDINR is expected to consolidate in the range of 74.60 to 75.25 in coming days.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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