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Rupee rises for third day, up 27 paise at 74.19 per dollar

Wed Nov 18 2020

 

The rupee continued its winning run for the third session in a row on Wednesday, spurting 27 paise to settle at 74.19 against the US dollar amid unabated foreign fund inflows and a weak greenback overseas.

 

At the interbank forex market, the domestic unit opened at 74.49 against the US dollar and touched an intra-day high of 74.09 and a low of 74.52.

 

It finally closed at 74.19 against the greenback, registering a rise of 27 paise over its previous close. The rupee had on Tuesday appreciated 16 paise to finish at 74.46.

 

“Indian rupee appreciated majorly on the back of weakness in dollar. The dollar slipped as rising Covid-19 cases in the US forced local authorities to impose fresh restrictions to curb the outbreak.

 

“Moreover, US Federal Reserve Chair Jerome Powell warned that surge in Covid-19 cases poses risk to the economy and would require more support from Federal Reserve and Government,” said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas.

 

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.21 per cent down at 92.22.

 

Mukadam added that the “rupee may trade in the range of 73.65 to 74.80 in next couple of sessions“.

 

Foreign institutional investors (FIIs) were net buyers in the capital market as they purchased shares worth Rs 3,071.93 crore on Wednesday, according to provisional exchange data.

 

“Rupee after opening on a flat note appreciated in the latter half of the session following suspected dollar inflows that hit the market. The currency is likely to extend its gains in the next couple of sessions as FIIs continue to pour in funds in the equity segment,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.

 

Somaiya added that “in the last couple of sessions FIIs have poured in another $1 billion taking the total to $5.1 billion in this month. We expect the USD-INR (Spot) to trade lower and quote in the range of 73.90 and 74.40.”

 

According to Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities, Indian rupee extended its gains on Wednesday supported by inflows into local stocks and dollar selling by exporters.

 

“The RBI intervention capped downside as the dollar buying from central bank came around the rate of 74.12-74.13 during the day. However, strong selling from exporters pushed the pair towards the short-term support of 74. The pair may remain under pressure and head towards 74 mark on strong inflows and dollar supply from exporters,” Vakil added.

 

“The Indian rupee appreciated against the US dollar, supported by foreign fund inflows into the domestic equity and debt markets. However, PSU dollar purchases, rumoured to be on behalf of the central bank, trimmed some of the gains,” said Sriram Iyer, Senior Research Analyst at Reliance Securities.

 

Source: www.thehindubusinessline.com

 

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