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HomeEconomyRupee rises 22 paise to close at 79.69 against US dollar

Rupee rises 22 paise to close at 79.69 against US dollar

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Mumbai, Jul 28 (PTI) The rupee appreciated 22 paise to close at 79.69 against the US dollar on Thursday, as a rally in the domestic equities and less hawkish signals from the US Fed triggered risk-on sentiments in the markets.

Fresh foreign capital inflows also supported the domestic unit, forex traders said.

However, elevated global crude prices and a strong greenback overseas capped the rupee’s gain, they added.

At the interbank forex market, the local unit opened sharply up at 79.80 against the greenback. During the session, the local unit witnessed an intra-day high of 79.64 and a low of 79.85 against the American currency.

The rupee finally settled at 79.69, registering a rise of 22 paise over its previous close. On Wednesday, the rupee declined 13 paise to close at 79.91 against the US dollar.

The US Federal Reserve on Wednesday raised key interest rates by 75 basis points for the second straight month.

According to Sugandha Sachdeva, Vice President – Commodity and Currency Research, Religare Broking, the Indian rupee has managed to clinch gains of around 0.30 per cent as the slide in the US dollar on the back of less hawkish US Fed rhetoric has boosted “risk on” sentiments in the markets and supported the local unit.

“The US Fed has delivered a second consecutive 0.75 percentage point rate hike on expected lines to stamp out scorching inflation, but has stopped short of providing any clear guidance about the pace and quantum of future rate hikes,” Sachdeva said.

On the domestic equity market front, the BSE Sensex ended 1,041.47 points or 1.87 per cent higher at 56,857.79, while the broader NSE Nifty jumped 287.80 points or 1.73 per cent to 16,929.60.

Markets are now hopeful that the US Fed might slow down the pace of its monetary tightening campaign amid waning growth momentum signalled by several high-frequency economic indicators.

Besides, strength in domestic equities has further underpinned the local unit. However, steady crude oil prices are still acting as a key headwind and capping gains in the local unit, Sachdeva noted.

“Looking ahead, we foresee the Indian rupee to face initial resistance at the 79.40 mark, and only a move past the same would open the doorway for further appreciation towards the 79 mark in the near-term,” Sachdeva said.

Foreign institutional investors turned net buyers in the capital markets as they picked up shares worth Rs 1,637.69 crore on Thursday, as per exchange data.

The dollar index, which measures the greenback’s strength against a basket of six currencies, was up 0.12 per cent at 106.58.

Brent crude futures, the global oil benchmark, rose 1.37 per cent to USD 108.08 per barrel.

“Rupee traded positive on the back of positive capital markets and negative dollar reaction after Fed’s 0.75 bps hike with a data-driven further stance from Fed chair Powell,” said Jateen Trivedi, VP Research Analyst at LKP Securities.

Trivedi further said that “higher crude prices kept gains limited in rupee. Going ahead route can be seen in the range of 79.50-79.95”. PTI DRR BAL BAL

This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.

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