Mumbai, Sep 9 (PTI) The rupee appreciated by 12 paise to close at 79.57 against the US dollar on Friday, tracking positive domestic equities and foreign fund inflows.
At the interbank forex market, the local unit opened at 79.66 against the greenback. It witnessed an intra-day high of 79.47 and a low of 79.66 during the session.
It finally ended at 79.57, up 12 paise from its previous close of 79.69.
“The key catalyst driving the Indian rupee higher has been the steep decline in crude oil prices wherein they have slipped to a 7-month low while hovering around the USD 90 a barrel mark,” Sugandha Sachdeva, Vice-President – Commodity and Currency Research, Religare Broking Ltd.
Every USD 10 a barrel fall in crude prices leads to inflation inching lower by around 25 bps and also reduces our import bill significantly which bode well for the economy as well as the Indian rupee.
The dollar index has also retreated from two-decade highs following a super-sized rate hike of 75 bps by the ECB and its hawkish stance, which is further supporting the local unit.
The “risk on” sentiments and strong gains in domestic equities are favouring a positive bias for the rupee-dollar exchange rate.
“The Indian rupee has witnessed a lot of resilience around the key 80.10 mark over the last couple of days, from where it has reversed course, and now seems to witness appreciation in coming days towards the 79.20 mark,” Sachdeva said.
According to Dilip Parmar, Research Analyst, in line with the stronger regional currencies following the broad-based weakness in the greenback, the rupee opened higher and managed to clock the second weekly gains.
“The ICE dollar index, a basket of the six currencies, fell more than a percentage point and is on track for its biggest daily drop in about a month. The verbal interventions from Japanese officials and hawkish commentary from ECB officials dragged the dollar lower,” Parmar said.
Moreover, strength in domestic equities backed by foreign fund inflows, stronger high-frequency data and long unwinding in the dollar supported the local unit.
Spot USDINR is expected to trade in the range of 79.20 to 80 in the near-term.
The dollar index, which measures the greenback’s strength against a basket of six currencies, fell 0.98 per cent to 108.63.
Brent crude futures, the global oil benchmark, advanced 1.72 per cent to USD 90.68 per barrel.
The rupee appreciated on positive domestic equities and a weak US dollar. The dollar declined by more than 1 per cent on a sharp bounce amid an unprecedented 75 bps rate hike by ECB to 1.25 per cent, said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
“Global inflationary pressures may also put pressure on riskier assets. However, weakness in dollar and positive cues from global markets may support Rupee at lower levels,” Choudhary said, adding, “USD-INR spot price is expected to trade in a range of Rs 79 to Rs 80.30 in the next couple of sessions.” On the domestic equity market front, the BSE Sensex ended 104.92 points or 0.18 per cent higher at 59,793.14, while the broader NSE Nifty gained 34.60 points or 0.19 per cent to 17,833.35.
FII inflows also supported the rupee. Foreign institutional investors (FIIs) were net buyers in the capital markets, as they purchased shares worth Rs 2,132.42 crore on Friday, according to provisional data. PTI DRR MR MR
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