Mumbai, Jul 22 (PTI) The rupee strengthened against the US currency for the second straight session on Thursday, closing 15 paise higher at 74.46 amid a rally in the domestic stocks.
At the interbank forex market, the rupee opened at 74.46, and hit an intra-day high of 74.33 and a low of 74.53. It finally finished at 74.46, higher by 15 paise over its last close.
On Tuesday, the rupee had settled at 74.61 against the US dollar. Forex market was closed on Wednesday on account of ‘Bakri Id’.
In the two straight sessions, the rupee has appreciated 42 paise against the American currency.
“The Indian rupee appreciated against the dollar as risk sentiment improved in the region amid hopes that the recent surge in coronavirus infections may not have a major impact on the global economic recovery,” said Sriram Iyer, Senior Research Analyst at Reliance Securities.
Additionally, markets could also be factoring in that the Fed and other central banks could continue to lend support to the economy fearing the recent surge of COVID-19 infections, Iyer said.
Regional currencies appreciated against the dollar and also lent support to the local unit.
Brent crude futures, the global oil benchmark, rose 0.98 to USD 72.94 per barrel.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, slipped 0.01 per cent to 92.74.
On the domestic equity market front, the BSE Sensex ended 638.70 points or 1.22 per cent higher at 52,837.21, while the broader NSE Nifty advanced 191.95 points or 1.23 per cent to 15,824.05.
Meanwhile, foreign institutional investors were net sellers in the capital market on Tuesday as they offloaded shares worth Rs 2,834.96 crore, as per exchange data.
According to Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd, over this year, risk-off events have not been sustained beyond 24-48 hours. The last one was no exception. After a brief sell-off in global equity markets on Monday, the risk-on mood is back strongly.
“Equity markets are higher and US Dollar Index is trading lower. Asian currencies are also gaining ground against the US Dollar. Add to that lumpy FDI flows,” Banerjee said.
USDINR spot touched an intra-day high of 74.33, the highest level since July 5. However, suspected RBI intervention pulled it back towards 74.47 by the close of trading.
“All eyes on ECB meeting tonight. Over the near term, USDINR may continue to oscillate within a range of 74.20-74.60, bracketed by RBI’s demand for USD and risk on mood globally,” Banerjee said.
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