The News Scroll 18 December 2020  Last Updated at 5:27 pm | Source: PTI

Rupee rises by 3 paise to 73.56 on forex inflows, weak dollar

Rupee rises by 3 paise to 73.56 on forex inflows, weak dollar
(Eds: Adds experts comments)

Mumbai, Dec 18 (PTI) The rupee appreciated by 3 paise to close at 73.56 against the US dollar on Friday amid sustained foreign fund inflows and positive domestic equities.

Traders said weakness in the American currency in the overseas market supported the domestic unit.

At the interbank forex market, the local unit opened at 73.55 against the greenback and witnessed an intra-day high of 73.49 and a low of 73.57.

It finally ended at 73.56 against the American currency, registering a rise of 3 paise over its previous close. On Thursday, the rupee settled flat at 73.59 against US dollar.

Meanwhile, the dollar index, which gauges the greenback''s strength against a basket of six currencies, was trading up 0.20 per cent at 90.00.

"Value erosion in dollar, excessive liquidity is driving foreign investors to bet big on Indian equities, which give the rupee a slight appreciating bias in the near term," said Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking.

Sachdeva further noted that "73.20-73.00 remains a strong hurdle for the rupee, and with the Reserve Bank standing in the way, bouts of large-scale appreciation can be ruled out. We reckon that the RBI will prefer to keep the rupee exchange rate stable between the 73 to 74.50 band for quite some time now".

On the domestic equity market front, BSE Sensex ended 70.35 points or 0.15 per cent higher at 46,960.69, while the NSE Nifty rose 19.85 points or 0.14 per cent to 13,760.55.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 2,355.25 crore on a net basis on Thursday, according to exchange data.

Brent crude futures, the global oil benchmark, fell 0.21 per cent to USD 51.39 per barrel.

The rupee appreciated by 8 paise against the US dollar during the week supported by a weak dollar and persistent inflows into local equities.

"Rupee consolidated in a narrow range for the whole of this week following consistent fund inflows in the equity segment and weakness in the dollar against its major crosses," said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.

Somaiyaa further said that "volatility for the currency remained low despite the Federal Reserve and Bank of England policy statement that was released earlier this week. Lack of cues on the domestic front is likely to keep the volatility low for the currency".

According to Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities, the rupee traded very muted near 73.50 on back of stable moves seen in dollar index. "Prices of crude and gold were very much neutral putting less pressure on importers to hedge against raw commodity".

Going ahead the rupee can be in stable range move with holiday season kicking from next week in major part of globe, Trivedi said.

"The Indian Rupee ended on a very flat note this Friday against the US currency. Most of the Asian currencies were weak against the US Dollar this Friday and capped gains," said Sriram Iyer Senior Research Analyst at Reliance Securities.

Technically, the USD-INR spot pair traded in a very narrow range amid weekly expiry. It holds a support near 73.40 below and a break could see a downside pressure up to 73.15-72.90 levels, Iyer added. PTI DRR MR MR

Disclaimer :- This story has not been edited by Outlook staff and is auto-generated from news agency feeds. Source: PTI
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